FY16 highlights and challenges

The group spent R176 million (FY15: R288 million) on capital expenditure during the period to maintain, improve and expand production capacity.

Financial

  • Group total revenue of R5,7 billion for the year is 10% below last year on the back of continued lower demand and depressed margins
  • As a consequence, we reported EBITDA loss of R248 million against last year’s loss of R254 million
  • Non-operating special expense items totalled R138,7 million against last year of R9 million due to R225 million incurred on retrenchment of about 1 200 employees, goodwill impairment of R12 million and R1,7 million loss on the sale of redundant fixed assets reduced by curtailment gain of R100 million on post-retirement medical aid
  • Finance costs increased to R477 million against last year of R466 million
Key highlights Key challenges
  • Scaw adapts to a changing business climate
  • Improved to B-BBEE level 2 on the new dti codes
  • Commissioning of R160 million high-speed,
    high-volume moulding line at Scaw’s Union
    Junction foundry
  • World-class producer of rail products
  • Integration of the Scrap Processing division
    into Rolled Products
  • Attained two top SEIFSA awards for the best
    artisan programme and the best SHE programme
    for the Steel Wire Ropes facility
  • R105 million expansionary project for the
    manufacture of premium chains, cold
    commissioned
  • Difficult global economic and market conditions
  • Slowing growth in China shifted focus to exports
  • Demand from local mining and construction
    industry remains sluggish
  • Rising electricity costs
  • Raw material (scrap metal) pricing and supply
    remains challenging given the large scale of
    export material from South Africa
  • Increased import competition