CIG uncertain about local outlook, but sees growth potential in Africa
Pan-African infrastructure group Consolidated Infrastructure Group (CIG) on Monday posted revenue growth of 29% to R2.7-billion for the six months to February 28, owing to its strategy to expand across Africa’s energy markets.
The company further reported a 20% year-on-year increase in its earnings before interest, taxes, depreciation and amortisation to R330-million; however, it noted that its earnings were negatively impacted by a reduction in profitability in CIG’s Angolan associate, AES, due to a slowdown in oil exploration, a stronger South African rand and higher interest costs.
Earnings per share and headline earnings per share were down 18.5% to 111c apiece. The group ended the period with cash of R548-million, compared with R481-million as at end-February 2016.
Meanwhile, CIG posted a strong order book, growing 25% year-on-year to R6.6-billion.
CEO Raoul Gamsu said he remained confident in the group’s focus on Africa and the Middle East, and is “pleased at the continued momentum in CIG’s international penetration in the period. The Middle East-Africa region presents a wealth of opportunity given the upward trend in renewable-energyprojects and continued demand for and funding of electricity grid infrastructure”.
The company’s power division remained the key driver of results and performed well, with its renewables start-up, CIGenco concluding its first contract for an independent powerproject in Namibia.
In South Africa, the division faced a mixed bag of conditions, with uncertainty in the municipal and renewable-energy sectors balanced by continued infrastructure investment on the part of Eskom and the mining sector.
The building materials and rail divisions both recorded stronger and positive growth, mainly due to improved market conditions and expanded market share.
Looking ahead, he noted that CIG would leverage the group’s cross-selling opportunities by “piggybacking” the established presence and local market experience of group companies to introduce their CIG peers’ products and services.
He also remained optimistic about opportunities in South Africa, despite the delays in starting Round 4 renewable-energyprojects. CIG is a major participant in Round 4 having secured R2.3-billion of work.