Su­per Group shares fall on lower earn­ings, rev­enue |

Rev­enue dives due to mori­bund econ­omy

Pretoria News - - BUSINESS REPORT - ED­WARD WEST ed­[email protected]

THE SHARE price of Su­per Group, a lead­ing trans­port lo­gis­tics and mo­bil­ity group, fell by 7.45 per­cent to R20.63 yes­ter­day af­ter it re­ported lower in­terim earn­ings and rev­enue hit by the mori­bund South African econ­omy as well as un­cer­tain global macro-events.

Chief ex­ec­u­tive Peter Mount­ford said that the de­clines for the six months to De­cem­ber 31 were due to low eco­nomic growth in South Africa, po­lit­i­cal un­cer­tain­ties in Europe and changes in prod­uct.

Su­per Group’s rev­enue fell 3 per­cent to R18.86 bil­lion, mainly due to a de­cline in Deal­er­ships UK’s rev­enue, which had been im­pacted by un­cer­tain­ties due to an elec­tion and Brexit, said chief fi­nan­cial of­fi­cer Colin Brown. Most di­vi­sions had ex­pe­ri­enced tough trad­ing con­di­tions.

Earn­ings be­fore in­ter­est, tax and amor­ti­sa­tion (Ebitda) de­creased by 7.9 per­cent to R1 28bn. This was due mainly to the un­der­per­for­mance of Sup­ply Chain Africa’s com­modi­ties busi­nesses, im­pair­ment of good­will in Phola Coaches, and introducti­on by SG Fleet of a re-de­signed pro­tected lease prod­uct. Op­er­at­ing profit fell 8.7 per­cent to R1.18bn – the op­er­at­ing profit mar­gin de­clined to 6.3 per­cent from 6.7 per­cent.

Sup­ply Chain Africa’s re­sults were hurt by mar­gin pres­sure in its com­modi­ties busi­nesses on the back of elec­tric­ity gen­er­a­tion and trans­mis­sion prob­lems in South Africa, and a sharp de­cline in com­mod­ity trad­ing in sub-Sa­ha­ran op­er­a­tions. Coal trans­port op­er­a­tions were par­tic­u­larly hard hit by rain in Novem­ber and De­cem­ber, said Brown.

The de­cline in prof­itabil­ity was partly offset by in­clu­sion of LiebenL­o­gis­tics and GLS Sup­ply Chain Equip­ment and a solid per­for­mance by Digis­tics. Three ac­qui­si­tions were made in the in­terim pe­riod, two from the same par­ent in South Africa and a small com­pany in Ger­many.

Sup­ply Chain Europe per­formed poorly in Ger­many, due to a de­pressed car mar­ket, the re­sult of pro­duc­tion-re­lated prob­lems in the coun­try,

In SG Fleet, de­spite grow­ing rev­enue, busi­ness faced ex­ter­nal pres­sures in­clud­ing the tough credit en­vi­ron­ment and poor new mo­tor ve­hi­cle sales.

The com­pany also changed its add-on in­sur­ance port­fo­lio, which re­sulted in a con­ver­sion of up­front to an­nu­ity-based in­come, which reduced the cur­rent pe­riod’s prof­itabil­ity.

Fleet Africa ended the pe­riod in a strong position, hav­ing ex­tended a ma­jor con­tract and se­cured a num­ber of new full main­te­nance lease and man­aged main­te­nance con­tracts.

Head­line earn­ings per share de­creased 12.3 per­cent to 152.5 cents.

The net debt-to-eq­uity ra­tio, ex­clud­ing lease li­a­bil­i­ties, in­creased to 30.1 per­cent, com­pared to 24.1 per­cent as at June 30, 2019. The net as­set value per share in­creased marginally by 0.3 per­cent from R30.37 at June 30, 2019, to R30.46 at De­cem­ber 31.

Cash gen­er­ated in­creased by 37.9 per­cent to R2.06bn.

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