Consolidated Infrastructure (CIG), which is the largest turnkey developer and installer of high-voltage electrical substations and overhead cables in sub-Sahara Africa, has seen its bottom line increase due to South Africa’s renewable energy independent power producer programme (RIEPPP). The group delivered robust results for the year ended 31 August 2013, driven by the delivery of substantial complex electrical work into South African REIPPP and development of new electrical infrastructure in West and East Africa, specifically Ghana, Kenya and Zambia.
Revenue grew by R483 million to R2,037 million (2012: R1 553 million) and earnings attributable to shareholders improved by 25 % to R 171 million from the prior year’s R 137 million.
Conco, which contributes 85% of CIG’s revenue, increased its revenue contribution by 35% to R1,727 million. The division successfully executed R600 million worth of highly complex electrical work on seven Round 1 projects of the South African department of energy’s REIPPP. The remaining R270 million is due for delivery next year. The subsidiary met all key milestones to date. While there are currently on-going negotiations on the award of Round 2 projects the group has secured orders of R290 million out of a potential R500 million. The division continues to focus its attention both in South African and across the African continent, where it has increased its focus to sustainably meet the continents growing electrical demands.
The Group expanded its Protection and Automation offerings and extended its services to other market segments across the African continent. The division was separated into a standalone business with an independent strategy and growth prospects. The independent division is anticipated to grow over the medium term and if successful will have a material impact on the division in 2015.
Further inroads were made in the Operations and Maintenance division to service the highly technical maintenance requirements of wind farm developers and original equipment manufacturers. The division won a maintenance balance of plant and a turbine maintenance contract during the year. An increasing trend from municipalities to outsource maintenance on a longer term contractual basis should also benefit the division.
Continued progress was made on the rest of the African continent and significant contract wins were achieved in Tanzania, Kenya, Uganda and Zambia in East Africa whilst Ghana and Angola continued to develop. The Saudi business successfully executed its first small project and the business has been selected for an additional R70 million project. Negotiations are on-going and the group anticipates closure of this project
CIG’s acquisition in specialist oil and gas waste management group, Angolan Environmental Services (AES) is expected to be completed in November 2013 when the quota is expected to be transferred. Management have been involved with this business since December 2012 and are pleased with its performance, which is in line with our expectations..
CEO of CIG, Raoul Gamsu says, “We have successfully delivered some complex electrical work in the South African renewable energy sector, which has substantially contributed to our robust results and demonstrated our technical and legal ability to deliver on time. The current order book of Conco and higher than expected levels of bidding and tenders awaiting adjudication will contribute to group’s sustainable growth path in South Africa.
“A growing population together with increasing urbanisation and purchasing power will increase our opportunities across Africa. Consequently, our focus to position our divisions to tender and flexibly deliver high value electrical projects into the African continent is also due to accelerate the groups’ growth prospects on the continent.”