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CONSTRUCTION WORLD
NOVEMBER
2016
loader range in the Middle East. This has been a very successful launch
which we are planning to expand to other markets in the near future.
While Middle East markets are suffering from the low oil price, the
region is a very big market for us and we will continue supporting our
excellently performing partners there, where we enjoy an exceptional
position such as market shares of 50% and more for Bobcat loaders.
Russia has also been quite a difficult market recently, but there are
signs of recovery and as we are prepared to support our partners in both
difficult and good times, we will enjoy success together once market
conditions improve.
In conclusion, do you have some general comments on
the EMEA market and your plans going forward?
Doosan Bobcat stands for long lasting partnerships, and for individual
solutions for all different markets whatever their challenges and
demands. Like most businesses, we did see a slight suspension in activity
in the UK before the referendum, but since the vote we have seen a
normalisation in business levels. The UK is an important market for
Doosan Bobcat and in our planning, we have not changed our business
strategy in light of the Brexit result.
With the excellent dealer network channel we have in the UK, I see
no big adjustments needed in the way we operate there and it
will have little impact on our sales in the rest of Europe.
In the very competitive European market, no one country in Europe
The transaction with enX, first announced
on 30 June 2016, involves the proposed
sale of Eqstra’s Fleet Management
and Logistics and Industrial Equipment divi-
sions to enX, whilst its Contract Mining division
remains listed.
Noteholders approved the proposed
amendments to the terms and conditions
of the outstanding notes on 22 July with
85,81% voting in favour of the transaction. On
22 September 2016, 91% of shareholders voted for
the proposed disposal of Eqstra’s Fleet Manage-
ment and Logistics and Industrial Equipment
divisions to enX in exchange for enX shares. The
last results announcement covers the 12 months
to 30 June 2016.
Commenting on the results, Eqstra CEO
Jannie Serfontein said: “This set of results
confirms the rationale for the transaction with
enX. As we have always maintained, the under-
lying fundamentals and performance of each of
the respective divisions is sound. The change
in capital markets and the need to evolve our
funding strategy to position Eqstra for long-term
sustainability requires us to appropriately match
our gearing to the long term nature of associated
capital equipment investments.”
For the year under review, the group reported
a loss of R2 253-million compared to a profit of
R254-million in the prior year.
The Contract Mining and Plant Rental division
remained focused on improving operating profit,
reporting a 45,2% increase in operating profit over
the prior year.
The Industrial Equipment division successfully
increased its new and used unit sales in a declining
SA forklift market by securing a number of new
contracts with blue-chip companies and its forklift
business in the UK continued to perform well.
The division reported a 16,7% increase in revenue
for the year.
The Fleet Management and Logistics division
reported strong performance during the year with
value-add products continuing to record growth.
Profit before tax was up 9,9% despite a strategy of
limiting leasing growth to reduce group gearing.
Other operations, including the IFRS 5 fair
value adjustment associated with the enX trans-
action, reported a loss of R1 007-million (2015:
R21-million loss) and remaining discontinued
operations reported a loss of R1 018-million (2015:
R150-million profit).
Looking ahead, Serfontein said: “Under the
new eXtract banner, contract mining will continue
DEAL SEALED AS FINAL APPROVALS RECEIVED
Eqstra Holdings Limited recently reported its last set of annual results
as a combined industrial group following overwhelming support by
shareholders and noteholders in favour of a R7,8-billion transaction
with enX Group Limited. The Competition Tribunal has also approved
the transaction.
Industrial group announces
last results in its current form
• Noteholder approvals of the proposed
amendments to the terms and
conditions of the outstanding notes
• Shareholders’ approval for enX to
purchase the Fleet Management and
Logistics and Industrial Equipment
divisions and to recapitalise the
Contract Mining business
• Competition Commission approval
received
• Right-sized businesses and
discontinued non-core operations in all
divisions
• New long-term funding secured for the
continuing operations post transaction
• Loss of R2 253-million (2015: profit of
R254-million)
• Decreased HEPS from 78,7cps to
29,9cps
>
to focus on improving the efficiencies of the
mines on which it operates as well as seeking
new projects to diversify the geographic and
commodity exposures. Over the next 24 months,
management will continue to realise best value
for the impaired excess and idle assets within the
business and proceeds will be applied to repay
debt. In the long-term our new mining services
group will look to grow by acquisition.”
really stands out in terms of
sales volumes. Our strongest
markets are in Germany, France,
the UK and Scandinavia, but we
are expecting good things from
Italy in the near future. Like
Spain, which is also beginning
to wake up after the recession,
the market in Italy has evened
out since the recession. We
also predict growth in Eastern
Europe, where infrastructure projects
are continuing to be funded by EU money.
We have made huge strides in the last five years with the Doosan
Heavy range in terms of market share and brand loyalty in Europe and
we believe that there is no big differentiation on the product side,
with Doosan Bobcat now part of the top tier of manufacturers. Bobcat
continues to defend its leadership position in EMEA in performance,
quality and durability.
The company has a long term commitment to the construction
equipment market in EMEA, simplifying procedures and processes
throughout to make sure it is even easier to do business with Doosan
Bobcat. Our continued focus on core businesses will enable us to
be successful in difficult market environments and by concentrating
resources on our key priorities, this will allow Doosan Bobcat to grow
even faster in the EMEA market.
Martin Knoetgen, president of
Doosan Bobcat Inc in Europe,
Middle East and Africa (EMEA).