Photo by: Duane Daws
JSE-listed engineering and electronics firm Ansys has narrowed its loss for the six months ended August 31, 2013, to R2.7-million, from R9.7-million in the first six months of 2012, on the back of a “low revenue-generating period” characterised by an expected slowdown in projects and a boost in tender activities.
In contrast, headline loss a share widened from 1.1c in the first half of the prior fiscal period to 1.9c in the period under review, owing chiefly to profit made on the disposal of noncore assets.
An improvement in basic loss a share from 6c in the prior year’s comparable period to a loss of 1.6c for the first six months of 2013 was attributed largely to the company’s ongoing restructuring process, which included a cost compression exercise, a clean-up of development cost assets in the prior financial year as well as a reduction in finance cost.
This drove a R1.5-million improvement in operating expenses to R15.1-million in the period under review.
Overall revenue narrowed by 37% year-on-year to R27.5-million, largely on the back of a substantial tapering of the income generated by the company’s rail division.
Revenue from this segment decreased by 52% to R19-million for the six months ended August 31, mainly owing to an expected decrease in project activities.
The majority of this segment’s revenue was generated from maintenance activities and the supply of spares for its installed product base, which provided a growing annuity income base.
“The railways market has shown improved prospects, as we have had major activity in tender submissions from our major customers during the period. Revenue from rail will continue to grow and we expect to create new revenue streams from the Southern African Development Community region, as the pace to modernise railway networks and locomotives by member States begins to rise,” the company said in an interim results statement on Friday.
On the upside, revenue generation by Ansys’ defence division for the period ended August 31 increased by 167% year-on-year to R7.9-million, owing mainly to the execution of a large order received in the last quarter of the 2012 financial year.
The firm said this business would remain “opportunistic and strategically positioned” to exploit the expected increase in defence spending, given government’s new impetus to expand the capabilities of the South African defence industry.
“However, performance in the second half of the 2013 financial year will continue on a similar path as the first half of the year,” Ansys held.
Meanwhile, the mining and industrial business continued to disappoint, achieving a modest R532 000 in revenue, owing to an embattled domestic mining sector.
“However, we will maintain our current client base and continue to invest in the rope monitoring systems, as we expect the mining market to turn,” the company noted.
Ansys would enter the second half of the 2013 fiscal year with an order book in excess of R26-million.