EOH on road to recovery, boosts share price
The group said in a revised-trading update on Friday that it was likely that its headline loss a share for the six months to end January would improve by 60percent to 395cents a share compared to a restated headline loss of 827c reported last year.
Last month, the group had said it expected its headline loss a share to improve by 47percent compared to last year’s loss of 827c.
The share price responded positively yesterday and rose to R3.31 a share, up from Friday’s closing price of R2.71, before closing at R3.06.
The group also expects its loss a share to improve by 67percent to 687c, improving from last year’s restated loss of 1689c.
But despite EOH’s efforts to restore the group to profitability, the Covid-19 pandemic was expected to impact the performance of EOH going forward, the group said.
According to media reports, EOH employees will see their salaries slashed by 20percent as the virus outbreak continues to wreak havoc in the markets.
However, the group said yesterday that it was not in a position to confirm the reports as it was busy finalising the half-year results, as well as its plan on how to mitigate the virus outbreak in its operations.
The plan was expected to be completed by last night.
EOH said it had a Covid-19 management team in place, consisting of representatives from the executive committee as well as key operational and support functions.
Their duty was to monitor the situation daily, and ensure adequate risk management and mitigation actions were taken as well as communications and engagement with clients, staff and other stakeholders, it said.
“These efforts include a complete review of customer requirements and all costs in the face of changing operational requirements across the entire business,” the group said.
The latest setback comes as EOH tries to turn around the company as it recovers from a corruption scandal.
In a revised strategy under Stephen van Coller, who was appointed as its chief executive in 2018, the group sold R523million in non-core assets during the financial year to end July.
EOH had previously announced that it would sell around R1.5billion worth of non-core businesses in order to reduce its debt and deleverage its balance sheet.
The group also restructured its operations into three units consisting of iOCO, Nextec and intellectual property (IP) businesses.
EOH will release its half-year results today.