I’m very pleased to note that in the financial year to end-March 2022 our business met budgeted levels both on profit and cash, despite a horrendous business environment, both globally and locally.
The war in Ukraine has created chaos in global markets through supply and commodity stocks, which have had a major impact on all countries. We’ve seen oil prices rise and major inflationary pressures across many items, leading in turn to increases in interest rates which have resulted in major weakening of emerging market currencies. Massive increases in logistics costs and delays, as well as shortages in raw materials required for production have also occurred as a result of the crisis.
Locally the major floods in KZN had a devastating impact on many lives as well as the economy. There were several of our operations affected through damage of property as well as an adverse impact on operations, which suffered disruptions to both water and electricity supply. Many of our staff were also affected, with damage to assets and disruption to services.
I’d like to commend all of our employees in Durban who got involved hands-on in the clean-up of our buildings. We are grateful to everyone for being so involved and supportive through this.
We have already passed the fifth wave of COVID-19 as I write, with infections declining. It is however important that we remain vigilant and maintain precautionary measures to prevent the spread of the disease.
Returning now to ACTOM’s success in “beating the odds”, albeit temporarily, during the 2021/22 financial year, our manufacturing businesses continued to experience a generally depressed capital cycle during that period. Offsetting this trend, good support came from the mining sector due to improved commodity pricing, while our aftermarket repairs and services businesses performed exceptionally well – a demonstration, incidentally, of how the increasing diversity of the group’s operations over time have helped to protect us to some extent from the negative impact of adverse conditions.
Two major contract awards won by group divisions during the year are worth noting:
- John Thompson’s Utility Boilers & Environmental (B&E) business unit secured a multi-billion rand boilerserve contract at Eskom power stations. This represents a major expansion of the unit’s boilerserve business with the utility.
- LH Marthinusen scored a major breakthrough by winning a long-term draught fan maintenance contract.
Our health and safety performance is currently at a LTIFR of 0.69. I’d like to commend everybody for maintaining a safe working environment.
In an attempt to make a difference in our own way as a leading player in our field, ACTOM has embarked on various initiatives to provide more training to people to help them earn an income. In addition to taking steps to expand the capabilities and scope of our Technical Training Centre for apprentices, the group kicked off a programme this year in which we recruited 20 young women from informal settlements around our Knights site to train them in such things as the basics of electrical repair, plumbing, solar panel installation and painting. This programme was developed with the specific objective of giving people basic skills to help them put food on the table in a matter of months.
Our country currently faces a major electricity supply crisis due to years of maintenance neglect. There are major backlogs in electricity generation, transmission and distribution which will ultimately culminate in major opportunities for the ACTOM group. There are also various initiatives towards renewable energy generation, as evidenced from the Risk Mitigation Round as well as Rounds 5 & 6, which are currently in the tender process. As these projects reach financial close we expect a surge in demand for our manufacturing operations and are optimistic as we head towards year end.
Mervyn Naidoo
