Santova uncertain about its economic outlook

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The company‚ which reported its results for the six months ended August 2014 on Monday‚ said headline earnings per share (HEPS) were up 23.8% to 15.47c. It said revenue climbed 13.9% to R116m‚ while profit for the period rose 25.3% to R17.5m.

"This growth was achieved despite a noticeable downturn in trading volumes as consumers and importers reacted to the current weak economic climate and outlook‚" said Santova.

It said that the growth had been achieved through a number of factors‚ including the continued weakening of the rand‚ which had a positive effect on the underlying 'US dollar-based' calculation of revenue in SA and on the translation of profits from the group's offshore investments; strong growth in revenue from project shipments‚ primarily into Africa‚ and the continued growth in the contribution of profit from the group's offshore investments.

Santova Logistics (SA) continued to be the core contributor to group revenue‚ contributing 58%. The division achieved a 9.7% increase in revenue and a 33.1% increase in profit for the period. The growth in revenue was driven primarily by a 454% growth in project revenue for the period as a result of a "significant increase in the number of projects awarded to the group".

The company said the effect of the poor economic climate would be mitigated by the internal efficiencies the group continued to drive in SA to maintain margins and remain cost-effective as well as the diversified earnings from the group's offshore subsidiaries and the fact that the second half of the financial year was cyclically the group's peak trading period.

"In addition‚ the group remains committed to expanding its footprint internationally through acquisitions and‚ as a result‚ the board believes that it can continue to deliver sustainable earnings growth and create long-term value for shareholders‚" it said.

Source: BDpro