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Further trading statement
Protech Khuthele Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2000/024352/06)
JSE code: PKH & ISIN: ZAE000101986
(“Protech” or “the Company” or “the Group”)
Updated trading statement
Further to the trading statement, published in terms of paragraph 3.4(b) of the JSE Limited
Listings Requirements, dated 31 January 2014 shareholders are advised that Protech’s
annual financial results for the year ended 28 February 2014 are expected to show a loss per
share of between 23 and 27 cents, and a headline loss per share of between 24 and 28 cents
per share, compared to earnings per share of 4.4 cents and headline earnings per share of
3.9 cents in the previous financial year.
The loss has to a large extent resulted from difficulties experienced in completing a mining
infrastructure project in the Democratic Republic of the Congo (“DRC project”). These
difficulties first came to light in November 2013. Protech is in a venture, for this contract,
with a leading South African construction company and Protech’s participation in the
venture is limited to 33.33%. The difficulties include payment disputes and cost over runs.
It was anticipated that a substantial proportion of the profit for the financial year would be
generated from the DRC project. This project, which had made substantial contributions to
profits reported in previous years is now anticipated to make a loss for the year ended 28
February 2014 although, overall, the contract remains profitable. The imminent completion
of the DRC project will see an end to the Group’s foreign exposure in the short to medium
term, and no further adverse effects are expected on the Group’s profitability going
forward.
In addition, the results have been adversely affected by the resolution of foreign tax issues,
and full impairment of long outstanding payments due on historical contracts for which no
progress has been made in recovery since the 2013 financial year end.
Notwithstanding the above setbacks, management is confident that, having secured 65% of
the total anticipated turnover for the 2015 financial year, the Group will again return to
profitability. This work secured is inside South Africa with private mining infrastructure
clients, public infrastructure clients and targeted sub-contracting to other major South
African contractors. The Group’s income is less subject to sector and geographic
concentration risk and is supported by a strong improvement in project delivery, with the
South African operations having achieved expected profit margins.
Group liquidity will remain tight until all payments due on the DRC project are paid during
the next six months and the effects of the new secured work generates positive cashflows.
Protech will publish its full year results for the 2014 financial year on or about 26 May 2014.
The financial information on which this trading statement is based has not been audited nor
reported on by the Company’s auditors.
Lanseria
13 March 2014
Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd
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