According to Engineering News, one of the main drivers behind Wilson Bayly Holmes-Ovcon’s (WBHO’s) healthy jump in profit in the 2016 financial year was the company’s success in grabbing a bigger share of the market, rather than an improving domestic environment, said CEO Louwtjie Nel on Tuesday.
A strong push in the building sector saw WBHO report a 72% improvement in operating profit, to R991-million, for the year ended June 30. Revenue increased by 6.3%, to R30.6-billion, compared with the 2015 financial year. “I don’t think the market in South Africa is improving,” stated Nel. That said, however, a “number of big projects on the infrastructure side” had appeared on the horizon, rather suddenly, for the first time in “four or five years”.
Nel said WBHO was “very happy” with the 2016 numbers, noting that the growth seen within the group’s building divisions in Africa and Australia moderated the impact of lower activity levels within the mining and civil engineering sectors. The group’s cash balance increased by a further R1.8-billion to R5.8-billion. Nel said WBHO was “looking for international opportunities” – of which there were quite a few – in the construction sector to spend this cash.
Mining-related activity in South Africa decreased substantially, following the completion of existing projects. However, the division replaced this work with mining projects in Mozambique, Botswana and West Africa. Operating profit at the Construction Materials division increased from R13-million to R37-million. Following the disposal of 3Q Mahuma Concrete Holdings during the year, Reinforced Mesh Solutions remains as the only continuing operation.
WBHO’s order book increased by 14%, from R37.4-billion in the 2015 financial year, to R42.7-billion in the 2016 financial year. WBHO has shed around 3 000 jobs over the last 18 months, which include contract and permanent staff. However, should “two or three projects materialise”, the company would need to again employ staff, noted Nel.
