Chemicals group Rolfes’s profits rise after overhaul

ROLFES’s restructuring during the year ended June helped boost profits, the chemicals group said in its results statement yesterday.

During the reporting period, Rolfes sold some high-volume, low-margin agri-operations to minority shareholders while buying up food chemicals firm Bragan Chemicals.

Revenue rose 13%, mainly on export growth into Africa and across Eastern and Western Europe. The customer base extends to Asia and North America, with the group having operations in Botswana, Zambia, Nigeria and Romania.

Exports comprised 22.7% of group revenue and included sales and services by foreign subsidiaries. Headline earnings per share shot up 30.4%. But severe drought in SA and neighbouring countries hit the agri-business while delays in finalising water projects in Botswana had a negative effect on business. Gross profit margins stayed at 22%.

“We really cleaned up the group structure substantially — we now have a 100% interest in nearly all our businesses,” CEO Lizette Lynch said.

“We believe the Bragan transaction is the cat- alyst for growth — and water has been an excellent addition to the group,” she said.

Rand weakness and high inputs costs largely balanced out, causing minor gains and losses. About 75% of its business derives from service and maintenance contracts, providing annuity income, with the rest product sales.

Rolfes said it was on track to build a blackcontrolled industrial group, supplying niche and commodity chemicals to the food, agricultural, water, industrial products and infrastructure sectors in SA and abroad.

This would be achieved through both organic growth and strategic acquisitions.

The finalisation of the R213m cash acquisition of Bragan will add a fourth division to its water, agricultural and industrial chemicals units. The new unit will add value in the food, bakery, beverage, dairy, pharmaceutical and cosmetics industries.

The group manufactures and distributes chemical products in the coatings, plastics, vinyl, tanning, ink, metallurgical, automotive, general manufacturing, agricultural, construction, home care, personal care, and water purification industries.