Sephaku slips into a loss as rivals aggressively pursue market share
Building and construction materials group Sephaku Holdings (SepHold) slipped into a loss in its year to end-September, saying it rivals were aggressively pursuing increased market share amid limited opportunities as infrastructure projects dry up.
The group reported a headline loss per share of 4.11c, from headline earnings per share of 12.59c previously, largely due to an underperformance by SepCem, its joint venture with Dangote Cement.
SepCem, of which Sephaku holds 36%, reported a 19% decline in cement volumes, with a net loss after tax of R21.6m, down from a profit of R44.6m previously.
“The building materials industry remains under pressure because of declining infrastructure investment,” said CEO Lelau Mohuba. “The operating landscape has resulted in some competitors engaging in extremely aggressive marketing tactics to secure market share.”
Wholly owned Métier, which manufactures ready-mix concrete products for SA’s industrial, commercial and residential markets, saw a 62% drop in after-tax profit to R7.7m. This was due to pervasive low demand and excess supply capacity.
Volumes for Métier in KwaZulu-Natal fell 15.7%, partially due to the suspension of several large construction projects.
The group managed to decrease expenses 26% year on year to R7.5m, with cuts including that of the CEOs’ salaries and staff numbers.