enX warns of profit fall due to Covid-19
The group expects full-year profit to decline as the pandemic deals a further blow to SA’s ailing economy
Petrochemicals and logistics group enX, which saw the sale of its fleet management business to Bidvest recently fell through, says it expects full-year profits to decline as Covid-19 puts even more pressure on SA’s economy.
The group expects both revenue and profit to decline in its full year, saying customers may struggle to maintain payments within terms due to liquidity issues, while it also expects a loss in revenue from those unable to operate.
The group reported that profit from continuing operations fell about 7% in its six months to end-February to R60m, with its industrial equipment business, which sells Toyota forklifts, under pressure from reduced demand in both SA and the UK.
This division’s profit before tax decreased by 11% to R97m with the group saying that finance costs had risen due to increased inventory levels.
In the group’s results, its fleet management business Eqstra was considered a discontinued operation, but the sale to Bidvest has since fallen through.
The parties said in July 2019 that they had agreed to the sale of Eqstra Fleet Management and Logistics in a deal worth about R3.1bn, which had been approved by enX shareholders in November. The deadline for the transaction was May 4, but the long-stop date has not been extended. On May 5, enX’s share price had fallen 30.37%.
In morning trade on Wednesday, enX’s share price was up 2.67% to R4.62, having fallen 54.93% so far in 2020.
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