Revenue increased to R4.5 billion (2015: R3.6 billion), gross profit rose to R986.3 million (2015: R785.6 million) and EBITDA grew to R475.5 million (2015: R414.5 million). In addition, profit attributable to equity holders of the parent rose to R395 million (2015: R330.2 million). Headline earnings per share were recorded at 255.3cps (2015: 220.7cps).
The dividend policy was reviewed by the board. After taking into account prevailing circumstances and future cash requirements, all earnings generated by the group will be utilised to fund the anticipated growth in the coming year, to settle the additional payment due on the Conlog acquisition as well as investment opportunities within CIGenco. Accordingly, no dividend has been recommended for the year.
Prospects remain positive in the Power Division, across South Africa and into sub-Saharan Africa. The order book has continued to grow substantially in absolute terms as well as in the average size of projects, demonstrating Conco’s reputation for providing innovative, large scale technical solutions on time and on budget. Conco’s improved focus across multiple sectors and diversified geographic base further enable the business to mitigate the risk of a sector or region specific downturn. The South African market is difficult to assess, with the Eskom spend increasing substantially while the municipalities have curtailed expenditure despite the backlog of almost R39 billion.
Conco has previously won contract awards of R2,3 billion from Rounds 4 and 4,5 of the Renewable Energy Feed-In Tariff Programme. Despite announced commitments by both government and Eskom to proceed, the commencement dates have been delayed by months. We have therefore excluded these contracts from the reported order book. The group has competence in the provision of electrical Balance of Plant in the renewable wind sector and is working to expand its offerings to the solar PV market. It is pleasing that renewables work ex-South Africa is gaining increasing momentum and the group currently has orders of R350 million and has submitted 21 proposals in this regard. In the event South Africa continues to slow or begins to curtail the roll-out of its Renewable Energy Programme, the impact on CIG will be mitigated by work from outside South Africa.
African utilities are expected to continue providing strong growth prospects and while awards in the oil exporting countries are slow, the majority of the countries on the continent are oil importers and remain committed to the expansion of infrastructure. As a result, Conco International should be able to leverage the increasing number of quality opportunities particularly in East Africa, Ethiopia and Southern Africa to deliver growth. In order to reduce the cost of funding, CIG is exploring funding opportunities of matching international revenues with either USD or Euro funding. It is anticipated that the cost of funding would be lower than current funding rates obtained in South Africa.
The recently acquired Conlog business is on track to exceed the warranted profits estimate for 2016 and the introduction to the company of some of Conco’s clients will in the medium term enhance performance. Expansion of Conlog’s prepaid services offering will be a priority going forward. Building Materials has seen a moderate pickup in demand post municipal elections and the division is particularly innovative in sourcing new opportunities for growth. The growing trend amongst cement manufacturers to explore alternative strategies to deliver future growth could be advantageous.
The market for Oil and Gas services in the short term will remain flat. AES will continue to process high volumes of materials but rental utilisation, currently just above 50%, will be stagnant. In the medium term, we are encouraged that the sector seems to have stabilised and that the oil majors are planning increased exploration from 2017. The private equity partner in AES continues to explore a strategy with regard to the disposal of their 16,5% interest in the business.
However this is not expected to have an impact on AES and CIG. The recent order book gains in the Rail Division will drive growth in Tractionel in the short term. While further delays are expected from Prasa, the eventual roll-out of the new locomotive programme will substantially enhance the potential for new work. In conclusion, the Group enter the new financial year with optimism that our geographic and sector strategies are yielding results and that sufficient capital is at its disposal to take advantage of opportunities.