Dual-listed mining engineering company DRA Global saw its headline earnings dwindle and revenue drop in the first half of 2022, but expects to benefit from new projects in the Middle East and Africa (Emea) in the second half.
Diluted headline earnings per share (Heps) fell just over four-fifths to 3.72c, while revenue is down 16.2% year on year to A$477.1m in its interim results to end-June. The company, which specialises in contract operations and plant maintenance, declared no interim dividend.
DRA Global generates just more than half of all revenue in SA (51.68%), with the country accounting for more than four-fifths (85.35%) of its revenue in Emea. Interim CEO James Smith said the region continues to show a “strong and steady performance”.
The company has five projects lined up in SA for the rest of the year, including work at Northam Platinum’s Zondereinde platinum mine, Ivanplats’s Platreef project, Glencore’s Tweefontein water reclamation plant, Umsimbithi Mining’s Wonderfontein mine and Sibanye-Stillwater’s Kroondal operations.
The company, headquartered in Perth, Australia, operates in Africa, the Middle East, Europe, Asia-Pacific, North and South America and employs more than 4,500 people. Its primary listing is on the Australian Securities Exchange (ASX), with a secondary listing on the JSE, where it is valued at R1.08bn.
Labour market shortages have hampered recent work in Emea. The company has also flagged further interest rate hikes and high inflation as factors that could drive up its cost base across all regions and weigh on margins in the short term.
The company’s finances were dragged down, with core earnings falling 119.43% from a profit to a loss of A$7.5m, plagued by legacy fixed-price construction contracts in the Asia-Pacific region.
“Those contracts have been terminated and associated contract claims are being commercially resolved with the estimated financial effects accounted for at June 30 2022,” Smith said.
“We will be refocusing on our core business and quality of earning in this second half,” he added.
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