Rolfes H1 headline earnings rise by 33% y/y

4th March 2019 By: Tasneem Bulbulia - Creamer Media Reporter

JSE-listed Rolfes Holdings’ revenue from continuing operations increased by 13.5% year-on-year to R833.1-million for the six months ended December 31, 2018, as a result of higher volumes in certain divisions.

The group noted, however, that the higher volumes could only be achieved at a lower margin, while the market was tough and pricing was key to maintain, and in some areas gain, market share.

Pressure on margins, specifically in the food chemical division, resulted in a lower translation of revenue through to gross profit.

Headline earnings, meanwhile, increased by 32.9% to 19.46c apiece, from 14.64c apiece in the six months ended December 31, 2017.

The group’s cash from operations increased by 19.9% to R71.8-million, from R59.9-million as at December 31, 2017.

The group declared an interim dividend of 4c apiece.

Meanwhile, proceeds were received on the finalisation of the sale of the silica mine and foreign operations were rationalised. The rationalisation of foreign operations was noted as the final step in refining Rolfes’ strategy and going back to basics.

The group’s strategy remains focused on developing sustainable businesses that deliver long-term growth.

Rolfes highlighted good progress in a tough operating environment, having concentrated on maximising market share and working capital management during this time.

The group will continue to focus on its South African businesses by adding new products,

leveraging off its customer base and distribution capabilities, and increasing its African revenues through direct exports.

In what it terms the current difficult economic environment, the board expects the group to continue trading satisfactorily.