Strikes eat into Eqstra's revenue

Johannesburg - Eqstra Holdings [JSE:EQS] increased revenue to almost R10bn in the year ended 30 June, despite being impacted by industrial action.

"We achieved a 9.8% growth in revenue, just short of R10bn", CEO Walter Hill told Fin24 in a video interview.

This growth was attributed to benefits arising from investment in revenue-generating assets, increased used vehicle remarketing and increased sales activity in the United Kingdom (UK).

The leasing and capital equipment company, which services clients in the construction, mining, industrial and commercial sectors, reported that operating profit fell 9.6% to R938m from R1.04bn.

"Operating profit was slightly down compared to what we would have liked to seen as we were impacted on by the contract mining and plant rental division through strikes and inclement weather," said Hill.

The group also reported a 26.3% drop in headline earnings a share to 76.7c from R1.04 compared to the previous year and no dividend were declared.

Hill said Eqstra pulled out of two non-profitable contracts and expects the contract mining division may be impacted by global pressure on commodity prices next year.

Eqstra was negatively impacted by Protech Khuthele Holdings Limited (Protech) voluntary liquidation order. All seven subsidiary companies of Protech filed business rescue applications.

However, Hill said the leasing and fleet management business has shown their resilience and performance and should have a fairly good set of results.

Watch: Eqstra grows revenue to R9.98bn

He said the core revenue-generating assets — leasing assets and finance lease receivables — grew by 4.8% to R10bn.

"That also bodes well for the future as that will be the underpinning assets that will generate our revenue for the next year," he added.

 - Fin24