JSE-listed South Ocean Holdings would attempt to diversify its subsidiaries to counteract the impact of a “very tough” market and increased competition, CEO Paul Ferreira said at the group’s 2012 full-year results presentation.

South Ocean aimed to diversify its revenue streams, develop and release new products and expand into the retail segment, while continuing its efficiency improvements.

The company also, for the first time, sub-mitted several tenders to supply products to State-owned power utility Eskom. The out-comes of these tenders were expected between March and May.

The South Ocean Electric Wire (SOEW) divi- sion, which manufactures low-voltage electrical cables, tendered for a five-year contract to supply Eskom with aluminium conductors valued at R1.6-billion and copper low-voltage products worth R800-million.

Radiant, the group’s lighting and electrical accessories subsidiary, tendered for a R100-million contract for the supply of five-million compact fluorescent lamps, as well as a R250-million contract for Eskom’s residential mass roll-out, supplying light-emitting diode, geyser head, showerhead, geyser timer and pool timer products.

The group would be required to form a joint venture with a Level 1 black economic-empowerment company, should it be awarded the latter tender.

In line with its move to tender, as well as to add spare capacity and improve efficiencies, the company injected capital expenditure into expanding production within the SOEW division – the first phase of which was com-pleted during the fourth quarter.

Phase 2 was expected to come on stream during the second quarter of 2013.

“South Ocean Holdings has now begun the journey of diversifying our revenue streams and product range and we are positive about our growth strategy both in South Africa and on the rest of the continent,” Ferreira commented.

He believed that improved performance and profitability would materialise during the 2013 financial year.

The group, which withstood a “very tough” market, generated revenue of R1.4-billion during the 2012 financial year – up 11.5% from the R1.2-billion recorded in the prior year.

The group reported a loss of R118-million for the year, down 358% from the profit of R45.7-million during 2011, South Ocean CFO Koos Bekker said.

Operating profit decreased by 220.3% to a loss of R91.1-million for the year under review, compared with the operating profit of R75.7-million achieved in 2011.

Headline earnings a share increased by 18.6% to 36.3c in 2012 from 30.6c in 2011. Earn- ings fell 358%, with South Ocean recording a basic loss a share of 75.6c during the full year to December 2012, compared with the basic earnings a share of 29.3c the year before.

“The earnings a share before accounting for the impairment charge would have been 36.3c, representing an increase of 23.9% compared to the prior year,” Ferreira said, referring to a R175-million charge against goodwill arising from the acquisition of Radiant in 2007.

This followed a decrease in the earnings of the subsidiary during the year owing to a more competitive market, consumer buying moving towards the lower-end, cheaper products and the significant impact of the national transport strike.

Radiant reported a 2.6% decrease in revenue from R363-million in 2011 to R354-million during the year under review. The unit’s operating profit fell to R15.1-million during the year – down 52.1% from the R31.5-million recorded the year before.

Earnings before interest, taxes, depreciation and amortisation (Ebidta) fell 47.4% from R38.6-million in 2011 to R20.3-million in 2012, Bekker noted.

SOEW contributed revenue of R1.05-billion, up 17.9% from R897.3-million, with an oper-ating profit of R52.8-million compared with the R33.9-million achieved in the prior year.

The subsidiary’s 2012 financial year earnings before Ebidta reached R64.3-million up 50% from R42.9-million in 2011.

South Ocean did not declare a dividend for the year.