Santova boosted by foreign operations

File picture: Free Images

File picture: Free Images

Published Dec 1, 2015

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Johannesburg - A strong contribution by the foreign operations of Santova boosted the financial results of the listed integrated logistics solutions provider in the six months to August.

Glen Gerber, the chief executive of Santova, said yesterday that a core benefit of its offshore strategy was highlighted in this reporting period and where the weakening of the rand had a positive impact on both the operational performance and financial position of the group.

Gerber said this was evident from the translation of operating profits from offshore subsidiaries increasing the contribution of these entities to 44.1 percent of group revenue in the six months to August from 38.1 percent in the previous corresponding period.

Forex

He said the revaluation of the group’s investments in these offshore subsidiaries, illustrated by the R18 million foreign exchange (forex) gain reported in other comprehensive income, converted into a strengthening of the group’s capital and reserves.

Key milestones achieved during the reporting period included the establishment on April 1 this year of a new sea freight-focused office in Hamburg, Germany, by Masterfreight Internationale Spedition, the group’s wholly-owned Germany subsidiary; the establishment and opening on August 1 this year of a new branch office in Ghana operating as a division of WH Shipping (UK), which represented the group’s first investment in Africa outside South Africa and gave the group a solid base in west Africa; and the finalisation of the acquisition effective from September 1 of 100 percent of Jet Freight Services, a long-standing freight forwarding business in Mauritius.

Gerber said although the Jet Freight Services and new branch established in Ghana were financially material, they were considered strategic because they were part of Santova’s strategy to expand its footprint internationally.

He said these transactions would not materially affect the group’s results for its 2016 financial year-end but were expected to have a positive impact on the group’s results in future financial periods.

Santova yesterday reported an almost 32 percent increase in profit to R22.99m in the six months to August from R17.47m in the previous corresponding period.

Revenue

This translated into an almost 48 percent growth in normalised headline earnings a share to 15.63c from 10.58c.

Revenue rose 8 percent to R125.8m from R116.5m.

Operating profit increased by almost 23 percent to R33.78m from R27.49m, with the operating margin improving by 14 percent to 26.9 percent from 23.6 percent.

Shares in Santova were unchanged at the close of trade, at R3.80 yesterday, which valued the company at R519m.

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