enX takes hit from cheap plastics and restructuring costs
Headline earnings per share halved to 41.2c in its year to end-August, with the company experiencing difficulties at its lubricants business
enX Group, which provides industrial and petrochemical products as well as fleet management services, said on Monday headline earnings per share more than halved in its year to end-August, with the company grappling with restructuring within its petrochemicals business.
The company, which blends and distributes ExxonMobil products, suffered a R166.4m write-down in its petrochemicals business, amid concern of cheap plastics due to shale gas availability in North America, as well as muted local demand.
This included a R93.5m write-down of its lubricants business, where the company has been restructuring its business to improve production facilities.
Group revenue from continuing operations rose 9% to R5.8bn, but the company slipped into an after-tax loss of R69m, from a profit of R99.3m previously.
Headline earnings per share from continuing operations fell 51.3% to 41.2c.
The company said on Monday its immediate priorities is the disposal of its fleet business, and a turnaround of its underperforming business, which would entail dealing decisively with structural inefficiencies.
“Although we are confident that the underperforming businesses will produce positive cash flow we do not anticipate that they will earn the required return on invested capital in the short term,” the company said.
In July, enX had announced Bidvest had agreed to buy Eqstra Fleet Management and Logistic. The company is waiting for shareholder and regulatory approval, and said it is working to conclude the transaction by the first quarter of 2020.