Coal demand set to bouy Buildmax

EXPORT demand for SA’s coal was forecast to remain strong in the short to medium term and many opportunities existed for Buildmax to provide its services to the coal industry as well as other mining sectors, the company said in its interim results yesterday.

Buildmax is a provider of opencast mining, mining services, bulk earthworks and a supplier of construction materials.

The group yesterday reported diluted headline earning per share of 0.51c for the six months ended August 3, from 0.02c previously.

Revenue was at R656.2m, while earnings before interest, taxes, depreciation, and amortisation (ebitda) advanced 21% to R131.9m.

Buildmax said coal production and consumption in SA had remained fairly unbalanced, with rising demand on one hand and constrained supply on the other.

“Eskom is expanding its power generation capacity by building several new coal fired power plants and returning into service existing power plants that had been mothballed.

“Eskom’s coal use is likely to increase by an additional 50-million tons by 2017, and for the same period the expansion of synthetic fuels will see coal consumption increasing by an additional 25million tons per annum,” the company said. For the period under review, the flagship brand, Diesel Power, grew revenue 15.8% to R491.6m while Ebitda margins improved from 22.5% to 25.9%.

“While trading conditions remain competitive, Diesel Power have secured a solid blend of short, medium and long term contracts which position it well for sustainable future growth,” Buildmax said.

The company’s civils and earthworks division reported a gain in revenue of 272.6% to R78.8m. Its aggregates and quarries operations experienced difficult trading conditions, but revenue rose 9% to R85.7m.