Gencor swells profit despite setbacks .
Melanie Cheary
JOHANNESBURG 1996-08-26
Gencor Ltd on Monday said it had swelled its year attributable profit and streamlined operations to strengthen it for the current financial year despite a variety of divisional setbacks .
Announcing the group 's results for the year ended June 30 , chairman Brian Gilbertson said : " Happily the strong improvement in financial performance is not an illusion arising from the recent weakness of the rand relative to the dollar . "
Gencor raised attributable earnings to 1,803 million rand from 1,003 million rand previously - in dollar terms an increase to $ 469 million from $ 279 million - and won despite the group 's Impala Platinum Holdings Ltd posting dismal results .
" Not everything has gone well .
We 've had substantial production difficulties at a number of our operations .
The most obvious one with the greatest effect on the corporation was at Impala where we had the furnace failure , " Gilbertson said .
Implats posted year attributable profit of 176 million rand from 281 million previously .
Not only did the company lock in 3.92 rand per dollar in February / March , but it suffered output losses due to a furnace shutdown last August .
The rand was last bid at 4.5350 against the dollar .
Nor was Implats the only operation to fail output targets .
Ingwe Coal Corporation Ltd was hit hard by heavy rains .
It forfeited nearly one million tonnes of production to flooding at its mines in Mpumulanga province .
But Gilbertson said the greatest gloom in the year came from the European Commission 's blocking of Implats ' proposed merger with Lonrho Plc 's platinum interests .
" The big disappointment for the year was the failure of the platinum merger .
From Gencor 's perspective we are taking the position that it is not on , " Gilbertson said .
Looking ahead to the current financial year , he said that Gencor would boost earnings further .
" Gencor is well placed to take up the challenges of the future .
The group is soundly structured and prudently financed and is blessed with an excellent portfolio of world-class businesses .
I think we can look forward to further growth " .
Citing the disposal of Gencor 's stake in industrial holdings group Malbak Ltd for one billion rand among other smaller disposals , Gilbertson said Gencor had pruned its portfolio to concentrate on core assets .
" We 've tried to clean up our overall portfolio by disposing of non-core assets .
The biggest of those was Malbak .
Overall a very substantial pruning ...
leaving Gencor clearly structured along commodity lines , " Gilbertson said .
He added that the group still had about 85 million rand after tax invested in various shares , which were market for disposal when required .
Referring to Gencor 's increased 41.5 percent stake in Ingwe , Gilbertson said the group would wait for coal shares to be cheaper before considering snapping up more .
" I think we would have liked to have more of Ingwe but it 's the question of adding value .
When we bought the shares we bought ...
at quite a bit lower than the price is now ...
maybe if we just wait another few years for the next downturn in coal . "
Finally , Gilbertson said a growing proportion of Gencor 's income was coming from offshore and unlisted investments .
-- Johannesburg newsroom +27 11 482-1003