DURBAN - EOH Holdings said on Friday that it had managed to reduce its debt by a further R409 million using proceeds from the disposal of assets as it continues on its road to recovery.
The group said deleveraging and proactively engaging with lenders remains its strategic priority. The group is left with an outstanding gross debt balance of R2 billion as at January 25, which has resulted in materially lower and more manageable financing costs.
EOH received R234m in September for the disposal of Dental Information Systems Holdings, with the remaining R16m being held in escrow until April 1, 2022. The information technology group also received R143m for the disposal of CCS as well as concluding the sale of 100 percent of the issued share capital of MARS Holdings for R211m.
The group said its cash generation had remained positive after the release of its yearresults at the beginning of December. Its cash generation from operations for the period was positive with a cash balance of R591m as at January 27 after paying R409m down on debt during this period.
“The group remains pleased with the progress made in managing liquidity following the implementation of its cash pooling arrangement. The group’s cash pooling policy allows for cash previously held in individual legal entities to be centrally managed. This improved visibility has significantly decreased liquidity risk for the business,” it said.
EOH noted that its total revenue remained resilient and in line with budget expectations despite the disruption caused by Covid-19 and it continued to benefit from the turnaround efforts executed in the 2020 financial year.
As a result, the group expected to post both an operating profit and positive earnings before interest, tax, depreciation and amortisation (Ebitda) for the first six months of the 2021 financial year. The share price closed 2.44 percent higher at R8.82 on Friday.
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