Johannesburg - With 68 percent of its income generated outside of South Africa, JSE-listed Consolidated Infrastructure Group (CIG) wants to take advantage of the infrastructural development taking place across the continent.
CIG is a pan-African infrastructure-focused group with a diversified portfolio of operations, including services and materials in power and electrical, oil and gas, building materials and the railway sector.
The group reported yesterday a 26 percent growth in revenue year on year to R4.53 billion for the year to end August, up from R3.6bn reported last year with profit after tax gaining 18 percent to R392.86 million, up from R331.41m reported a year before.
Headline earnings per share (HEPS) increased by 16 percent to 255.3 cents a share, up from 220.7c a share. The revenue and HEPS have risen by 192 percent and 125 percent, respectively since 2012.
Chief executive Raoul Gamsu said the company was encouraged by the results. “We set ourselves five years to achieve these results and we have done it in three years, so we are very pleased with the performance,” he said.
Gamsu said the management’s successful cost control in building materials grew earnings year-on-year, despite waning volumes as a result of the poor local economy.
Cost control
In oil and gas services, stronger results were driven by higher volumes following regulatory changes and foreign currency devaluation.
The increasing urbanisation and infrastructure development across Africa is propelling the group’s aggressive growth strategy. The demand for electrification specifically continues to rise in east and southern Africa.
“The economy in some of the countries that we operate has shown tremendous growth. The economy in Ethiopia is growing by 8 percent, Kenya by 6 percent and Rwanda by around 4 percent. This is much better than what South Africa is achieving at the moment.”
Gamsu said in South Africa it remained challenging to conduct business. “Municipalities are spending less, but Eskom has increased its spending which is good for the economy.”
The group is expecting the Conlog acquisition to contribute significantly in its future results. Conlog, electricity and smart meter provider, was acquired in August for R850m.
The acquisition aligns with CIG’s strategy of further diversifying earnings into an allied high growth infrastructure sector.
“The inclusion of Conlog in the CIG portfolio is expected to boost group profitability over 30 percent in the year ahead,” Gamsu said.
The group opted not to pay a dividend because all earnings generated by the group will be utilised to fund the anticipated growth in the coming year, to settle the additional payment due on the Conlog acquisition as well as investment opportunities within CIGenco.
CIG shares fell 2.54 percent yesterday to close at R23.
BUSINESS REPORT