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CONSOLIDATED INFRASTRUCTURE GROUP LIMITED - Unaudited condensed consolidated interim financial statements for the six months ended 28 February 2019

Release Date: 04/06/2019 15:09
Code(s): CIL     PDF:  
 
Wrap Text
Unaudited condensed consolidated interim financial statements for the six months ended 28 February 2019

Consolidated Infrastructure Group Limited 
(Incorporated in the Republic of South Africa) 
(Registration number: 2007/004935/06)
JSE share code: CIL
ISIN: ZAE000153888
Debt company code: CIG
("CIG" or "the group" or "the company")

Unaudited condensed consolidated interim financial statements
for the six months ended 28 February 2019 ("interim period")

Commentary

Introduction
Consolidated Infrastructure Group Limited ("CIG") is a pan-African infrastructure-
focused group with a diversified portfolio of operations in Power, Building
Materials, Oil & Gas and Rail. The group's footprint spans South Africa, sub-
Saharan Africa and the Middle East.

CIG reports disappointing results for the six months to 28 February 2019 
("the period"). Group revenue decreased by 8,8% from R1,304 million to 
R1,189 million. The loss after taxation for the group is reported at 
R1,220 million (H1 F2018: R1,203 million loss).

The group incurred a loss per share of R4,56 (H1 F2018: R6,13). After adjusting 
for the impairment in goodwill and intangible assets, the headline loss per 
share is R4,17 (H1 F2018: R3,42).

Despite the significant operating loss, only R133,8 million of cash was utilised 
in operations (H1 F2018: R96,5 million). Net cash outflow from operating 
activities was R281,1 million (H1 F2018: R255,1 million).

This period has been impacted by a tough macro-economic environment with pressure 
on most of the group's operations, especially in the engineering, procurement 
and construction ("EPC") businesses within the Power and Rail segments.

The results have been further impacted by impairments to unrecoverable work in 
progress and receivables, mainly in the Conco business, as well as impairments 
to goodwill and intangibles and deferred taxation. These impairments do not 
represent future cash outflows and thus do not impact on the group's liquidity 
forecasts. These impairments are further discussed within the divisional overview.

Group recapitalisation
During the period, the company successfully concluded its capital raising and,
following a rights offer which closed on 24 December 2018, received R777 million
of net fresh capital, resulting in Fairfax Africa Holdings Corporation ("Fairfax
Africa") acquiring a significant shareholding in CIG.

In addition, the board of directors was also reconfigured on 30 January 2019. 
The reconstituted board of directors was established with members with appropriate 
skill and expertise specifically in  financial management, reporting and internal 
control governance; capital resource management and allocation; trading within the 
rest of Africa, as well as engineering and construction business management.

The appointment on 2 April 2019 of Cristina Teixeira, a highly-skilled group CFO, 
who has deep industry knowledge, has in two months already had a significantly 
positive impact on the actions and decisions being taken within the business.

The group's cornerstone shareholder, Fairfax Africa, remains committed to the 
long-term prospects of CIG's offering and opportunities across the African 
energy space.

Divisional overview
Power
Conco

R'000                              H1 F2019        H1 F2018             F2018
Revenue                             729 423         579 676         1 234 432
Loss after taxation                (839 646)       (629 790)       (1 243 692)

Conco supplies substations and delivers high voltage electrification work 
including wind farms and solar parks across Africa and the Middle East.

Operationally, Conco continued to suffer difficult trading conditions, 
unfavourable work conditions in South Africa, slower than anticipated contract 
awards and downward pressure on margins. This resulted in budgeted profit from 
unsecured contracts failing to materialise, along with an under-recovery on 
project overheads carried in anticipation of these contracts. Support services 
costs remain in excess of those required to sustain the current trading volumes.

Conco remains focused on successful execution of REIPPPP Round 4 projects in 
hand, which represents approximately 60% of current work on hand.

During the period under review, the business continued to make progress in 
improving its project management and financial reporting processes including:
- Assessments of and accountability on project execution and performance;
- Evaluation of the recoverability of recorded balance sheet values; and
- Liquidity management.

As a result, several impairments to work in progress and receivables balances, as 
well as impairments to intangible assets were recorded during the period. These 
impairments relate to costs incurred and cash spent in previous years.

Internally generated intangible assets, valued at R39,4 million, relating to a 
power-solution product development which is in progress for a specific customer, 
was impaired due to the early stages of development of the product and thus its 
suitability for recognition as an asset.

A provision for the possible impairment to under-certified revenue and contract 
debtors of R155,9 million on various projects was recorded.

Accruals for various direct and indirect taxation liabilities in multiple 
jurisdictions, as well as the reversal of taxation assets expected not to be 
recoverable was charged against earnings, totalling R142,3 million.

The material active contracts were re-assessed in the period and downward margin 
adjustments were processed, to reflect the expected realisable estimated 
completion margin, resulting in a charge against earnings of R110,5 million.

In addition, the cost to complete active contracts was reassessed and a charge 
against earnings of R31,8 million was recorded on a few onerous contracts.

Stock and materials on hand was assessed at period-end and inventory valued at
R24,5 million was scrapped.

The deferred taxation liability required for temporary differences was reassessed 
by each of the Conco operations and a liability of R21,9 million was raised.

In addition, retrenchment costs of R11,4 million were recorded in the period.

The impact of all the above adjustments has been factored into the division's 
liquidity forecasts.

The introduction of a new Conco CEO, Jonny Dladla, on 15 November 2018 and CFO, 
Graham Comins, on 1 March 2019, both with significant industry knowledge, has been 
well received both by the organisation and its external stakeholders, and they 
have already made significant progress with a focus on instilling a culture of 
accountability, improved project management and processes, monitoring of project 
margin and cash flow. Monthly project reviews were introduced in the period, 
attended by both Conco and CIG management, enabling early remedial intervention 
on contracts where necessary.

A cautious approach has been adopted regarding the inclusion of earnings and cash 
enhancements from unapproved variation orders and claims. Further, recovery plans 
have been implemented on all projects which indicated a completion date later than 
the initial programme with regular monitoring by the Conco CEO. The commercial 
skillset within the business has been recently bolstered with a key focus on 
improving the organisation's contracting processes and addressing claim management 
and recovery thereon.

To bolster liquidity management, a Project Management Office programme was 
introduced requiring daily feedback on project cash flows, with feedback to 
CIG management and the group's recently constituted financial committee,  
comprising certain members of the CIG board of directors.

In addition, a contract engineering expert is being appointed, to independently 
assess and monitor project performance and adherence to the contract delivery 
programme with regular feedback to the CIG and Conco management.

The Conco order book is reported at R3,6 billion (F2018: R4,7 billion).

Conlog
R'000                                 H1 F2019        H1 F2018           F2018
Revenue                                218 379         312 840         656 075
Profit after taxation                    2 927          60 062         152 275

Conlog provides pre-paid and smart electronic metering devices and solutions, 
from design to distribution. Services for utilities and municipalities include 
revenue management, revenue protection, pre-payment with smart load control 
and load management.

Conlog's performance for the period was satisfactory in the prevailing economic 
landscape, albeit that the business performance was below that of the prior 
comparable period and its budget for the first six months. This is due to lower 
than expected sales to its primary customer which impacted on the business's 
performance in the period. Short-term actions to curtail discretionary and 
non-essential spend have been taken and the cash generation expectation for 
the next period is expected to exceed earnings levels.

The group is cognisant of Conlog's customer concentration risk and has developed 
diversification strategies. Sales levels are expected to recover in the
latter half of calendar year 2019 and into 2020.

Conlog will continue targeting meter leasing and platform opportunities to grow 
annuity income and introduce new services. Opportunities for Conlog remain 
significant.

Other
R'000                                H1 F2019         H1 F2018           F2018
Revenue                                15 672           20 551          41 239
Loss after taxation                   (94 704)        (109 176)       (120 717)

Consolidated Power Maintenance maintains renewable energy sites and 
transmission substations.

During the period, an impairment of goodwill of R1,9 million was recorded. In 
addition, a provision was raised for potentially unrecoverable debtor balances 
and costs incurred on contracts not yet certified totalling R12,8 million. A 
deferred taxation asset of R5,5 million related to assessed losses incurred, 
which was previously raised, was also reversed and charged against earnings 
until the utilisation thereof can be reasonably demonstrated.

CIGenCo designs and develops mid-sized power generation projects in Africa. 

CIGenCo remains focused on co-developing and operating clean energy power-
producing plants to grow annuity income. The contribution from its Namibian
Ejuva Solar Energy projects remain pleasing.

During the period, the group also impaired the recognition of all costs incurred 
on projects under development where the group deems financial close not to be 
achievable in the short term. This impacted the segment results by R67,8 million.

Rail
R'000                                H1 F2019          H1 F2018           F2018
Revenue                                23 914           147 952         259 123
Loss after taxation                  (122 246)           (5 119)        (43 331)

Tractionel specialises in the electrification of railways and the installation
of overhead traction equipment.

The business continued to experience quiet activity levels with few new contracts 
awarded and a resultant under-recovery of overheads.

A provision of R86 million was made against two contracts in which there are 
ongoing legal disputes, resulting in the business reporting a loss for the 
period.

A deferred taxation asset of R27,2 million related to assessed losses incurred, 
which was previously raised, was also reversed and charged against earnings until 
the utilisation thereof can be reasonably demonstrated.

Building Materials
R'000                                H1 F2019          H1 F2018           F2018
Revenue                               201 289           242 954         515 701
(Loss)/profit after taxation          (82 781)            8 474          27 275

Drift Supersand mines a range of aggregates and West End Claybrick ("West End")
manufactures clay bricks and concrete roof tiles.

The division continued to perform steadily in the period within difficult local 
macro-economic conditions amplified by the lack of expenditure within traditional 
construction works.

West End's concrete roof tile component performed well, while its clay bricks 
remain under pressure with cyclical demand.

During the period an impairment of goodwill of R64,3 million was recorded relating 
to both the aggregate business as well as the clay brick business. In addition, 
the business enhanced its provision for rehabilitation liability.

Oil & Gas
R'000                                 H1 F2019         H1 F2018            F2018
Profit after taxation                   18 672           10 419           50 646

AES is a waste disposal service provider to the oil and gas industry in Angola. 
The company performed well in the period to meet budget and continues to have 
some strong near-term growth opportunities as the number of new drilling rigs 
increases.

Recapitalisation
The group's debt standstill agreement with its funders expired on 31 May 2019
and the group has been successful in securing an extension until 29 July 2019,
with the expectation that the key conditions of the debt restructuring agreement
be agreed before the end of June 2019.

The group, along with its funders are focused on concluding a finalised 
restructured debt agreement within this timeframe. Specific conditions on 
covenants, pricing and other matters as would be expected in support of a normal 
debt restructuring process, are being discussed. Once finalised between the 
company and its funder group, the structure will progress for consideration by 
each of the funders' credit committee's and the company's board of directors, 
culminating in finalised legal agreements.

CIG thanks its funders for their co-operative efforts in supporting the group to 
re-establish sustainability.

Outlook
Across the continent, the opportunities for CIG's power businesses continue to
be driven by:
- Growth in renewable energy and off-grid industrial-scale opportunities in
Africa;
- Leveraging the established regional presence/market experience of group
companies to geographically expand other group companies' products and services;
- Normality returning to the South African market and recovery with award and
ability to execute contracts; and
- Financing of grid infrastructure-utilising export credit funding lines.

Management remains focused on the long-term strategy to transition the group
away from the vagaries of EPC contracting and into a sustainable platform 
supplying power needs across Africa.

Basis of preparation
Statement of compliance
The unaudited condensed consolidated interim financial statements are prepared 
in accordance with International Financial Reporting Standards ("IFRS"), 
(IAS) 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as 
issued by the Accounting Practices Committee and Financial Pronouncements as issued 
by the Financial Reporting Standards Council, the JSE Listings Requirements and the 
requirements of the Companies Act of South Africa.

The accounting policies applied in the preparation of these interim financial 
statements are in terms of International Financial Reporting Standards and are 
consistent with those applied in the previous consolidated annual financial 
statements for the year ended 31 August 2018, with the exception of International 
Financial Reporting Standard 15: Revenue from Contracts with Customers and 
International Financial Reporting Standard 9: Financial Instruments, which 
have been adopted in these interim financial statements for the first time.

Changes to significant accounting policies are described below.

The unaudited condensed consolidated interim financial statements have been 
prepared by C de Kock CA(SA) under the supervision of CMF Teixeira CA(SA).

The condensed consolidated interim financial statements were not reviewed or 
audited by the group's external auditor.

The unaudited condensed consolidated interim financial statements of the 
Consolidated Infrastructure Group Limited were authorised for issue by the board 
of directors on 3 June 2019.

Estimates and contingencies
The group makes estimates and assumptions concerning the future, particularly
with regard to construction contract profit taking, provisions, arbitrations, 
claims and various fair value accounting policies. Accounting estimates and 
judgements can, by definition, only approximate results, as the actual results 
may differ from such estimates. Estimates and judgements are continually evaluated 
and are based on historic experience and other factors, including expectations of 
future events that are believed to be reasonable under the circumstances.

Total financial institution guarantees offered to third parties on behalf of
 subsidiary companies amounted to R1,8 billion.

Change in accounting policies
A number of new or amended standards became effective for the current reporting
period. The group has adopted the following new standards, which are relevant 
to the group, for the first time:
- IFRS 9: Financial Instruments (IFRS 9)
- IFRS 15: Revenue from Contracts with Customers (IFRS 15)

The adoption of these standards has resulted in the group changing its accounting 
policies. The impact of the adoption of the new accounting policies is disclosed 
below. The prior year annual financial statements did not have to be restated as 
a result of the changes in the group's accounting policies, as IFRS 15 and IFRS 9 
were adopted without restating comparative information.

IFRS 15: Revenue from Contracts with Customers (IFRS 15)
IFRS 15 supersedes IAS 18 (Revenue), IAS 11 (Construction Contracts) and related 
interpretations for annual periods beginning on or after 1 January 2018. IFRS 15 
applies to all revenue arising from contracts with customers, unless those 
contracts are in the scope of other standards.

IFRS 15 establishes a comprehensive framework for determining whether, how much 
and when revenue is recognised, providing additional guidance in many areas not 
covered in detail under the previous revenue standards and interpretations. The 
standard requires entities to exercise judgement, taking into consideration all 
of the relevant facts and circumstances when applying the framework to the 
contracts with customers. The standard also specifies the accounting treatment 
for the incremental costs of obtaining a contract and the costs directly related 
to fulfilling a contract. IFRS 15 further includes extensive new disclosure 
requirements.

As permitted by IFRS 15, the group has elected not to restate the comparative 
information. Accordingly, the impact of IFRS 15 has been applied using the 
modified retrospective restatement method allowed under the standard resulting 
in an adjustment to the group's opening retained earnings. The comparative 
information presented for 2018 is therefore presented as previously reported 
applying the previous revenue standards and interpretations.

In assessing contract positions on an individual project basis as required by 
IFRS 15, contract assets recognised under IAS 11 were not regarded as 
contractually receivable and were therefore reversed under IFRS 15 into cost 
of sales. The cumulative effect of the retrospective application on the group's 
retained earnings is reflected within the group's statement of changes 
in equity.

The group derives revenue from contracts with customers for the supply of 
goods and services. Below is the group's revised revenue treatment of each 
product type.


Segment:
Building Materials

Types of revenue stream:
- Revenue generated from the sale of crushed stone, rock and aggregates for 
the construction industry for application in roads, ready mix, concrete and 
for stabilisation

Treatment under IAS 11 or IAS 18:
- Individual contract per customer with revenue recognised on transfer of 
completed unit (IAS 18)*

Treatment under IFRS 15:
- Individual contract per customer with revenue recognised on transfer of 
completed unit - revenue recognised at a point in time


Segment:
Building Materials

Types of revenue stream:
- Revenue generated from the manufacture and sale of a range of clay bricks and 
concrete roof tiles for the building sector including developers, contractors 
and wholesalers

Treatment under IAS 11 or IAS 18:
- Individual contract per customer with revenue recognised on transfer of 
completed unit (IAS 18)*

Treatment under IFRS 15:
- Individual contract per customer with revenue recognised on transfer of 
completed unit - revenue recognised at a point in time


Segment:
Power - Conco

Types of revenue stream:
- Revenue generated from the construction of high voltage turnkey electrical 
substations, overhead power lines, renewable energy - wind and solar - and 
related products

Treatment under IAS 11 or IAS 18:
- Individual contract with revenue recognised based on percentage completion 
(IAS 11)*

Treatment under IFRS 15:
- Individual contract treatment with revenue recognised over time#


Segment:
Power - Conlog

Types of revenue stream:
- Revenue generated from manufacturing and distribution of pre-paid electricity 
meters along with related applications and support services

Treatment under IAS 11 or IAS 18:
- Individual contract per customer with revenue recognised on transfer of 
completed unit and provision of support service (IAS 18)*

Treatment under IFRS 15:
- Individual contract per customer with revenue recognised on transfer of 
completed unit - revenue recognised at a point in time


Segment:
Power - Other

Types of revenue stream:
- Revenue generated from long-term operational and maintenance services to 
wind farms, solar parks, municipalities and utilities - often on projects 
constructed by Conco

Treatment under IAS 11 or IAS 18:
- Individual contract per customer with revenue recognised over the period 
of maintenance services being provided (IAS 18)

Treatment under IFRS 15:
- Individual contract treatment with revenue recognised over time
as the maintenance services are being rendered for the customer


Segment:
Oil & Gas  

Types of revenue stream:
- Revenue from waste management services provided to the oil and gas 
industry. This encompasses the collection, recycling and disposal of 
oil-based waste created during the drilling process

Treatment under IAS 11 or IAS 18:
- Individual contract per customer with revenue recognised over the 
period of waste management services being provided (IAS 18)

Treatment under IFRS 15:
- Individual contract treatment with revenue recognised over time
as the waste management services are being rendered for the customer


Segment:
Rail       

Types of revenue stream:
- Revenue generated from provision of transmission lines, substations up to
132 kV as well as installation and maintenance of electrical lines for railway 
lines

Treatment under IAS 11 or IAS 18:
- Individual contract per customer with revenue recognised on percentage 
completion for the construction of the transmission lines and substations 
(IAS 11)*, on installation for the customer (IAS 18) and over the period of 
maintenance of electrical lines (IAS 18)

Treatment under IFRS 15:
- Individual contract per customer with three performance obligations 
- Revenue on construction of transmission lines and substations to be recognised 
over time. Revenue recognised on installation for the customer at a point in time. 
Revenue recognised over time as maintenance of electrical lines are completed


Segment:
Rail       

Types of revenue stream:
- Revenue generated from provision of railway maintenance services to Gautrain, 
Transnet, PRASA, private siding owners such as mining houses

Treatment under IAS 11 or IAS 18:
- Individual contract per customer with revenue generated from the maintenance 
provided over time (IAS 18)

Treatment under IFRS 15:
- Individual contract treatment with revenue recognised over time
as the waste management services are being rendered for the customer


Segment:
Corporate

Types of revenue stream:
- No revenue is generated by the corporate segment

* Based on an individual contract basis as if treated as a separate engagement 
and not part of an integrated development.
# Exact treatment will be assessed based on the individual contract with the 
customer and the underlying terms and conditions that are unique to each contract. 
Revenue may, in certain cases, be recognised at a point in time rather than over 
time and may have more than one performance obligation as determined by IFRS 15. 
Each will be assessed on its own set of underlying facts and recognised according 
to the guidance contained in IFRS 15.

IFRS 9: Financial Instruments (IFRS 9)
IFRS 9 replaces IAS 39: Financial Instruments: Recognition and Measurement 
for annual periods beginning on or after 1 January 2018. IFRS 9 brings
together all aspects of accounting for financial instruments that relate to the
recognition, classification and measurement, derecognition, impairment and hedge 
accounting.

Dividend
The group's policy is for the board of directors to consider a dividend on an
annual basis after reviewing the annual results. No dividend is recommended.

Special resolutions
In terms of the provisions of section 45(5)(a) of the Companies Act 71 of 2018
("the Act") and pursuant to the special resolution passed at the annual general
meeting of the company held on 27 March 2019 authorising the board of directors
("the board") to provide direct or indirect financial assistance to related and
inter-related parties, notification is hereby given that the board has adopted a 
resolution in terms of section 45(3)(b) of the Act authorising the company to 
provide financial assistance for working capital purposes to Consolidated 
Power Projects Group Limited and Tension Overhead Electrification Proprietary 
Limited, trading as Tractionel Enterprise, both wholly-owned subsidiaries of CIG, 
which constitutes financial assistance in terms of section 45 of the Act and 
which financial assistance exceeds one tenth of one percent of the company's 
net worth.

In accordance with section 45 of the Act, the board is satisfied and 
acknowledges that:
- Immediately after providing such financial assistance, CIG would have
satisfied the solvency and liquidity test as provided for in section 4 of 
the Act, and
- The terms under which such financial assistance has been given are fair 
and reasonable to CIG.

Changes to the board of directors
A previously announced, the CIG board of directors was reconstituted in 
January 2019.

Mr Frank Boner, Mr Alex Darko, Mr Anthony Dixon and Professor Kalu Ojah 
resigned. The board thanks the past members for their contribution over 
the years.

Mr Michael Wilkerson was appointed as a non-executive director and Chairman 
of the board of directors. Mr Ahmad Mazar, Mr Quinn McLean and Mr Sean Melnick 
were appointed as non-executive directors. Mrs Cindy Hess and Mr John Beck were 
appointed as independent non-executive directors.

A previously announced, Cristina Teixeira was appointed as CFO with effect from
2 April 2019 replacing Sean Jelly who was appointed as an interim CFO from
November 2018. We thank Sean for his contribution while serving as CFO.

Appreciation
The directors and management of CIG wish to thank all staff for their loyalty 
in these difficult times. We also thank our customers, business partners, 
advisers, suppliers and our shareholders for their ongoing support.

By order of the board

Michael Wilkerson             Raoul Gamsu
Chairman                      CEO

Johannesburg
3 June 2019


Unaudited condensed consolidated statements of comprehensive income
for the six months ended 28 February 2019
                                      Unaudited       Unaudited       Audited
                                     six months      six months          year
                                          ended           ended         ended
                                    28 February     28 February     31 August
R'000                                      2019            2018          2018
Revenue                               1 188 677       1 303 973     2 706 570
Cost of sales                        (1 515 753)     (1 500 531)   (2 837 268) 
Gross loss                             (327 076)       (196 558)     (130 698) 
Other income                             19 306          28 004        39 615
Other operating loss                          -               -           (22) 
Operating expenses                     (647 771)       (569 358)     (947 994) 
Foreign exchange loss                   (30 129)        (92 777)      (23 047) 
Operating loss                         (985 670)       (830 689)   (1 062 146)
Impairment of carrying value in
joint arrangement                             -        (134 401)     (134 401)
Impairment of goodwill                  (66 241)       (397 938)     (472 490) 
Gain on settlement of
instalment sale liabilities                   -               -           342
Equity-accounted income from
joint ventures and associates            19 884          10 419        50 944
Loss before interest                 (1 032 027)     (1 352 609)   (1 617 751) 
Interest received                        18 083          10 939        26 212
Interest paid                          (138 985)       (130 019)     (248 341) 
Loss before taxation                 (1 152 929)     (1 471 689)   (1 839 880) 
Taxation                                (67 278)         268 992     (187 882)
Loss for the period                  (1 220 207)     (1 202 697)   (2 027 762)
Total loss for the period 
attributable to:
Equity holders of the company        (1 213 104)     (1 202 916)   (2 022 177) 
Non-controlling interest                 (7 104)            219        (5 585) 
Other comprehensive income:
Items that will be reclassified 
to profit and loss:
Exchange rate differences on
translating foreign operations           17 725         (27 433)       19 708
Remeasurement of defined
benefit liability                             -           1 012         3 272
Total comprehensive loss             (1 202 482)     (1 229 118)   (2 004 782)
Total comprehensive loss 
attributable to:
Equity holders of the company        (1 195 379)     (1 229 337)   (1 998 453) 
Non-controlling interest                 (7 104)            219        (6 329)
Basic loss per share (Rand)               (4,56)          (6,13)       (10,30) 
Diluted loss per share (Rand)             (4,56)          (6,13)       (10,30)


Unaudited condensed consolidated statements of financial position 
as at 28 February 2019
                                      Unaudited       Unaudited       Audited
                                          as at           as at         as at
                                    28 February     28 February     31 August
R'000                                      2019            2018          2018
Assets
Non-current assets                    1 967 860       2 321 458     2 135 636
Property, plant and equipment           503 685         495 582       526 984
Goodwill                                613 237         754 029       679 478
Intangible assets                       113 937         153 743       161 881
Deferred tax                             15 131         385 928        32 374
Investment in joint arrangement         714 579         521 036       727 526
Financial assets                          7 290          11 140         7 393
Current assets                        3 511 864       3 459 615     3 692 963
Inventories                             296 065         257 799       327 996
Financial assets                            924           5 890           796
Trade and other receivables             468 490         447 251       729 460
Amounts due from contract
customers                             1 102 660         608 876       815 477
Contracts work in progress              486 230       1 729 664     1 196 462
Taxation receivable                      54 679         106 743        51 328
Cash and cash equivalents             1 102 816         303 392       571 444
Total assets                          5 479 724       5 781 073     5 828 599
Equity and liabilities
Equity                                1 306 068       2 616 004     1 846 114
Share capital                         3 105 928       2 328 926     2 328 926
Share-based payment reserve              60 959          55 184        60 958
Foreign currency translation
reserve                                  82 459          16 849        64 734
Accumulated (loss)/profit            (1 927 935)        216 736      (600 265) 
Total equity attributable to
equity holders of the company         1 321 410       2 617 695     1 854 353
Non-controlling interest                (15 343)         (1 691)       (8 239) 
Non-current liabilities               1 097 334         310 988     1 075 836
Financial liabilities                   949 399         200 478       962 125
Provisions                               24 560          17 346        20 974
Operating lease liability                     -           6 569         1 765
Instalment sale liabilities              15 098          17 800        18 702
Deferred tax                            108 276          68 795        72 270
Current liabilities                   3 076 322       2 854 081     2 906 649
Other financial liabilities             468 122         945 399       468 865
Trade and other payables              1 336 068       1 118 121     1 250 669
Contract excess billings                643 682         247 115       624 988
Bank overdraft                          586 958         522 042       530 782
Provisions                                3 874             589           589
Instalment sale liabilities              12 148          12 198        14 192
Operating lease liability                 4 412           3 377         4 804
Taxation payable                         21 059           5 240        11 760
Total equity and liabilities          5 479 724       5 781 073     5 828 599


Unaudited condensed consolidated statements of changes in equity
for the six months ended 28 February 2019
                                           Share-      Foreign        Accumu-
                                            based     currency          lated
                              Share       payment  translation        (loss)/
R'000                       capital       reserve      reserve         profit
Balance as at 
31 August 2017            2 328 926        49 410       44 282      1 418 640
Share-based payments              -         5 774            -              - 
Other comprehensive
loss for the period               -             -      (27 433)         1 012
Loss for the period               -             -            -     (1 202 916) 
Balance as at 
28 February 2018          2 328 926        55 184       16 849        216 736
Share-based payments              -         5 774            -              - 
Other comprehensive
loss for the period               -             -       47 885          2 260
Loss for the period               -             -            -       (819 261) 
Balance at 
31 August 2018            2 328 926        60 958       64 734       (600 265)
IFRS 15 adjustment in
equity                            -             -            -       (114 567)
Restated balance at 
31 August 2018            2 328 926        60 958       64 734       (714 832)
Share issue                 777 002             -            -              - 
Other comprehensive
loss for the period               -             -       17 725              -
Loss for the period               -             -            -     (1 213 104) 
Balance as at 
28 February 2019          3 105 928        60 959       82 459     (1 927 935)


                                          Total
                                   attributable
                                      to equity
                                        holders          Non-
                                         of the   controlling           Total
                                        company      interest          equity
R'000                                     as at         as at           as at
Balance as at 31 August 2017          3 841 258        (1 910)      3 839 348
Share-based payments                      5 774             -           5 774
Other comprehensive loss for
the period                              (26 421)            -         (26 421)
Loss for the period                  (1 202 916)          219      (1 202 697) 
Balance as at 29 February 2018        2 617 695        (1 691)      2 616 004
Share-based payments                      5 774             -           5 774
Other comprehensive loss for
the period                               50 145          (744)         49 401
Loss for the period                    (819 261)       (5 804)       (825 065) 
Balance at 31 August 2018             1 854 353        (8 239)      1 846 114
IFRS 15 adjustment in equity           (114 567)            -        (114 567)
Restated balance at 31 August 2018    1 739 786        (8 239)      1 731 547
Share issue                             777 002             -         777 002
Other comprehensive loss for
the period                               17 725             -          17 725
Loss for the period                  (1 213 104)       (7 104)      (1 220 207) 
Balance as at 28 February 2019        1 321 410       (15 343)       1 306 068


Unaudited condensed consolidated statements of cash flow
for the six months ended 28 February 2019                     
                                      Unaudited       Unaudited       Audited
                                     six months      six months          year
                                          ended           ended         ended
                                    28 February     28 February     31 August
R'000                                      2019            2018          2018
Cash flows from operating activities
Cash (used)/generated from
operations                             (133 836)       (96 498)         51 247
Interest income                          18 083         10 939         26 212
Finance costs                          (138 985)      (130 019)      (247 292) 
Tax paid                                (26 382)       (39 482)       (69 913)
Net cash flows used in
operating activities                   (281 121)      (255 060)      (239 746)
Cash flows from investing activities
Acquisition of property, plant
and equipment                           (16 207)       (38 273)       (91 774)
Proceeds on sale of property,
plant and equipment                       1 291            151          4 433
Investment in intangible assets          (9 220)             -        (35 976) 
Disposal of financial assets                  -              -          5 672
Acquisition of financial assets            (425)             -              -
Additional in investment in
joint arrangement                             -              -        (29 672)
Repayment in investment in
joint arrangement                         4 410              -              -
Net cash flows from investing
activities                              (20 151)       (38 122)      (147 917)
Cash flows from financing activities
Proceeds on share issue                 777 000              -              - 
Repayment of financial liabilities      (10 510)             -              -
Additional financial liabilities              -        109 885        418 099
Repayment of instalment sale 
liabilities                              (5 647)       (17 300)        (9 050)
Net cash flows from financing
activities                              760 843         92 585        409 049
Total cash and cash equivalents
movement for the period                 459 571       (200 597)        21 386
Cash and cash equivalents at
beginning of the year - net              40 662        (10 556)       (10 556)
Effect of foreign currency
translation on cash balances             15 626         (7 497)        29 232
Total cash and cash equivalents 
at the end of the period - net          515 859       (218 650)        40 662


Unaudited segmental analysis
for the six months ended 28 February 2019                     
                                      Unaudited      Unaudited        Audited
                                     six months     six months           year
                                          ended          ended          ended
                                    28 February    28 February      31 August
R'000                                      2019           2018           2018
Revenue
Building Materials                      201 289        242 954        515 701
Power                                   963 474        913 067      1 931 746
Conco                                   729 423        579 676      1 234 432
Conlog                                  218 379        312 840        656 075
Other                                    15 672         20 551         41 239
Rail                                     23 914        147 952        259 123
Total                                 1 188 677      1 303 973      2 706 570
(Loss)/profit after tax
Building Materials                      (82 781)         8 474         27 275
Power                                  (931 424)      (678 904)    (1 212 135)
Conco                                  (839 646)      (629 790)    (1 243 692)
Conlog                                    2 927         60 062        152 275
Other                                   (94 704)      (109 176)      (120 717) 
Oil & Gas                                18 672         10 419         50 646
Rail                                   (122 246)        (5 119)       (43 331)
Corporate                              (102 428)      (537 567)      (850 217)
Total                                (1 220 207)    (1 202 697)    (2 027 762)
Assets
Building Materials                      629 213        669 080        714 448
Power                                   995 385      1 939 851      1 752 361
Conco                                   384 061      1 337 518      1 045 362
Conlog                                  569 279        588 153        706 418
Other                                    42 045         14 180            582
Oil & Gas                               682 155        521 036        691 429
Rail                                     64 790        215 623        201 676
Corporate                             3 602 899      3 185 162      3 254 773
Inter-group elimination                (494 719)      (749 679)      (786 088)
Total                                 5 479 724      5 781 073      5 828 599
Liabilities
Building Materials                      479 326        438 037        474 381
Power                                 2 493 151      1 905 291      2 229 533
Conco                                 2 280 156      1 636 787      1 943 014
Conlog                                  201 650        252 931        270 411
Other                                    11 345         15 572         16 107
Oil & Gas                                66 467         79 618         71 975
Rail                                    135 708        122 195        146 098
Corporate                             1 376 722        962 396      1 408 884
Inter-group elimination                (377 719)      (342 468)      (348 386)
Total                                 4 173 656      3 165 069      3 982 485


Unaudited notes
for the six months ended 28 February 2019

Headline earnings
                                      Unaudited      Unaudited        Audited
                                     six months     six months           year
                                          ended          ended          ended
                                    28 February    28 February      31 August
R'000                                      2019           2018           2018
Reconciliation of headline 
earnings:
Loss attributable to ordinary
shareholders (basic earnings)        (1 213 104)    (1 202 916)    (2 022 177)
Adjusted for:
Profit on disposal of property,
plant and equipment*                        (54)          (109)           (16)
Impairment of goodwill                   66 241        397 938        472 490
Impairment of intangibles                39 387              -              - 
Impairment of carrying value
in joint arrangement                          -        134 401        134 401
Headline earnings attributable
to ordinary shareholders             (1 107 530)      (670 686)    (1 415 302)

* Profit on disposal is net of tax of R16 (February 2019), R42 (February 2018)
and R6 (August 2018).


Loss per share
                                      Unaudited      Unaudited        Audited
                                     six months     six months           year
                                          ended          ended          ended
                                    28 February    28 February      31 August
R'000                                      2019           2018           2018
Weighted average number of
shares in issue (000's)                 265 772        196 255        196 255
Diluted weighted average number
of shares in issue (000's)              265 772        200 087        196 255
Basic loss per share (Rand)               (4,56)         (6,13)        (10,30) 
Diluted loss per share (Rand)             (4,56)         (6,13)        (10,30) 
Headline loss per share (Rand)            (4,17)         (3,42)         (7,21) 
Diluted headline loss per share (Rand)    (4,17)         (3,42)         (7,21)


Corporate information
Business and postal address
First Floor, 30 Melrose Boulevard, Melrose Arch 2196
PO Box 651455, Benmore, Johannesburg 2010
Telephone: 011 280 4040
Facsimile: 086 748 9169

Company secretary
CIS Company Secretaries Proprietary Limited

Transfer secretaries
Computershare Investor Services Proprietary Limited

Sponsor
Java Capital

Board of directors
Non-executive chairman
M Wilkerson# 

Lead independent non-executive director
R Hogarth*

Non-executive directors
T Hudson#, A Mazar^, Q McLean@, S Melnick&

Independent non-executive directors
K Bucknor+, K Kariuki$, J Nwokedi*, C Hess*, J Beck@

Executive directors
RD Gamsu* (CEO), CMF Teixeira* (CFO)

* South African       # American
^ Pakistanian         @ Canadian
& British             + Ghanaian
$ Kenyan

Auditor
PricewaterhouseCoopers Inc.

Investor relations
Singular Systems IR

Released on 4 June 2019

Visit our website: http://www.ciglimited.com

Disclaimer
The group has in good faith made reasonable effort to ensure the accuracy and
completeness of the information contained in this document, including all
information that may be regarded as "forward-looking statements". Forward-
looking statements may be identified by words such as "believe", "anticipate", 
"expect", "plan", "estimate", "intend", "project", "target". Forward-looking 
statements are not statements of fact, but statements by the management of the 
group based on its current estimates, projections, expectations, beliefs and 
assumptions regarding the group's future performance and no assurance can be 
given to this effect.

The risks and uncertainties inherent in the forward-looking statements contained 
in this document include but are not limited to changes to IFRS and the 
interpretations, applications and practices subject thereto as they apply to 
past, present and future periods; domestic and international business and market 
conditions such as exchange rate and interest rate movements; changes in the 
domestic and international regulatory and legislative environments; changes to 
domestic and international operational, social, economic and political risks;
and the effects of both current and future litigation.

The group does not undertake to update any forward-looking statements contained 
in this document and does not assume responsibility for any loss or damage and 
howsoever arising as a result of the reliance by any party thereon, including, 
but not limited to, loss of earnings, profits or consequential loss or damage.


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