REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 ST AUGUST 2011

REVIEWED INTERIM RESULTS FOR THE SIX MONTHS

ENDED 31ST AUGUST 2011

2012 – UP UP AND AWAY!

COMPARATIVE INTERIM REVIEW

H1 FY 2011R’000

H2 FY 2011R’000

H1 FY 2012R’000

Revenue 750 798 615 635 857 524

Gross margin 147 504 13 941 79 895

Profit/(loss) before interest and tax

38 013 (54 436) (14 415)

Capex 37,3m 13,1m 152,3m

Ratios

Operating margins 5,1% (8.8%) (1.7%)

Turnover increase/ (decrease) on previous interim period

(10,6%) (18%) 39.3%

Gross margin 19,6% 2.3% 9.3%

CONTENTS

• Salient features• Financial review• Strategy• Operational review• Capex• Group geographical segments• General• Conclusion• Contacts

SALIENT FEATURES – 31 August 2011

Order book up to R1,5 billion

Revenue up 14,2% (Aug 2010 comparative)

EBITDA down 2,9%

HEPS down 195%

R 2,3 billion short-term prospects pipeline

HEPS down from 4,1 to (3,9) cents Group operating loss (1,7)% (2011H 2:

(9%))

• Geotechnical 5% (2011H2: (2%))

• Civil (6)% (2011H2:(9%))

• Pipelines 0.3% (2011H2:(6%))

SALIENT FEATURES – 31 August 2011

FINANCIAL REVIEW

Statement of Financial Position Salient Features:

AtAug 2010

R’ 000

At Feb 2011

R’ 000

AtAug 2011

R’ 000

Assets

Non-current assets 986 302 966 187 1 085 923

Current assets 622 468 498 164 626 951

Total assets 1 608 770 1 464 351 1 712 874

Equities and liabilities

Share capital and reserves

758 829 703 156 893 375

Non-current liabilities 376 813 195 562 298 564

Current liabilities 473 128 565 633 520 935

Total equity and liabilities 1 608 770 1 464 351 1 712 874

Net asset value per share (cents)

258,4 238,9 230,1

• Total assets ↑ R 248,5m • Cash ↓ R 62m

• Trade & other receivables ↑ R 137,0m

• PPE R 152,3m Capex• Cash reserves

• Operational cash-flow consumed (R 55.7m)• Acquisition PPE (R 152,3m)• Proceeds rights issue R 200m• Decrease in secured borrowings (R 53m)

• Secured borrowings• Debt/debt + equity ratio 26,4 % (Aug 2010 :

34,1%)• Equity

• Loss after tax (R 18,7m)• FCTR R 6,3m

Statement of Financial PositionSalient Features - Feb11 to Aug 11

Debt:Equity Ratio

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

100 000

200 000

300 000

400 000

500 000

600 000

700 000

800 000

900 000

1 000 000

2006 2007 2008 2009 2010 2011 2012

R'00

0

Financial years

DEBT: EQUITY PLUS DEBT

Equity

Interest bearing debtDebt:equity ratio

Statement of Income Salient Features

Aug 2010R’000

% Aug 2011R’000

Revenue 750 798 14,2% 857 524

EBITDA 75 171 (66,2%) 25 405

Profit /(loss) after tax 12 311 (251,7%)

(18 677)

Headline earnings/(loss)

12 006 (225,3%)

(15 047)

Headline earnings /(loss) per share

4,1 (195%) (3,9)

Esorfranki (Mnth)

Geotechnical

Civils

Pipelines

STRATEGY

Short term • Competition Authority - current and ongoing• Rights offer - completed• BEE scorecard improvement to Level 4 - completed• Consolidate and integrate operating divisions into one single

entity - completed• Expand market share into SSA growth countries - ongoing

Civils - Mozambique Geotechnical – Ghana, Kenya

• Restore profitability with existing contract portfolio and divisions• Working capital management

Medium to long term• Further geographical expansion• Expanding the product range organically and acquisitively to

focus specifically on growth sectors• BEE scorecard improvement

Group Strategy

Divisionalisation

Esorfranki Limited• Holding company

Esorfranki Construction (Pty) Ltd

• Operations company• Civils• Geotechnical• Pipelines• Shared Services• All off-shore companies and divisions

Esorfranki Properties

New Group Structure as of 1 March 2011

• Durban• The former Esor Africa and Franki Africa will operate

as Esorfranki Geotechnical Division from single premises situated in Phoenix Industrial Park from 1st September 2011.

• Johannesburg• The former Esor Africa’s operations excluding

pipejacking have moved to the Wynberg facilities and together with the former Franki Africa operate as Esorfranki Geotechnical

• Esorfranki Pipejacking is operating under Esorfranki Civils from our Activia Park facilities

Geotechnical Merge

Currently working in Ghana for an Australian mining group

The Esorfranki Network

OPERATIONAL REVIEW

Business Unit Order BookAs at 31 Aug

2011(R millions)

Secured Revenue FY

2012(R millions)

Secured Revenue FY 2013

(R millions)


(R millions)

Geotechnical 244 603 15 -

Civils 984 781 382 205

Pipelines 568 277 134 270

Total 1 796 1 661 531 475

Outstanding Order Book and Secured Revenue

Business Unit Order BookAs at 31 Aug

2011(R millions)

Secured Revenue FY

2012(R millions)


(R millions)


(R millions)

Geotechnical 244 603 15 -

Civils 984 781 382 205

Pipelines 137 227 33 -

Total 1 365 1 611 430 205

Outstanding Order Book & Secured Revenue excluding Western Aqueduct

Esorfranki Civils

• Road building

• Bridge construction

• Township infrastructure

• Mining infrastructure

• Water reticulation

• Water towers & reservoirs

• Sewer reticulation

• Bulk earthworks

• Building

Civils products and services

Geographical footprint & some key contracts

Civils Segment Revenue Aug 2010

R’ 000Aug 2011

R’ 000

Segment revenue 225 321 354 366

Profit/(loss) before interest and tax 24 097 (22 096)

Segment assets 459 909 718 654

No of employees 1 176 1 544

Revenue growth (34%) 57%

Operating margins 10,6% (6,2)%

Order book 501 801 983 954

Pending awards 515 000 2 200 000

Prospects 2 600 000 3 000 000

Non-government 36% 34%

Government 64% 66%

* As at 28/02/2011

Civils outlook 2012 and beyond• K71/R55 current road contract R213m

• RAL current road contract R80m• Budget of R500m for new road contracts

• Kusile current civils and earthworks contract R326m• Potential add-ons to current contract R300m• Admin block R200m• Commercial fill R150m• Crushing contract R400m

• Lawley current infrastructure contract to existing low-cost housing R30m• Potential for adjacent developments

• Bakwena N4 Mooinooi current road contract R330m • Mine work Atcom (Xstrata) and Anglo R200m

• Big dig cannels R120m targeted for next year

•N1/N2 Winelands PPP we should get some geotechnical work from the contract

Civils outlook 2012 and beyond (cont.)

• Housing• Mozambique middle class housing and infrastructure 1st phase R700m 1-2

year

• Johannesburg low-cost housing R1,5bn 3-4 years

• Eastern Cape low-cost housing R550m 1-2 years

• Building• The Rose in Rosebank current R30m

• Roedean Hostel current R17m

• Munitoria pending R100m

• Pipejacking• Current contracts this year R100m (short term contracts)

Esorfranki Pipelines

Add a picture here

• Gas & Petrochemical steel pipelines

• Water & Wastewater pipelines & pump stations

• Sewer pipelines & pump stations

• Pipeline refurbishments

• Cement mortar lining

• Valve chambers

• Associated concrete structures

• Associated infrastructure

Pipelines products and services

Pipelines Segment Revenue

Aug 2010R’ 000

Aug 2011R’ 000


PBIT 423 313


No of employees 467 475

Revenue growth (21,6%) 10,7

Operating margins 0,41% 0,27%

Order book 240 488 567 618

Pending award 425 000 170 000

Prospect 5 900 000 500 000


Government 100% 100%

* As at 28/02/2011


BG3 Pipeline contract

Pipelines outlook 2012 and beyond

• Current contracts• BG3 contract near Vaal Dam R160m still to do.• Miscellaneous contracts R35m still to do• Western Aqueduct R420m awaiting review application on 16th

September 2011 but currently working on site• Mooihoek 3 contract R60m

•Potential awards• Giyani R200m (under appeal by Esorfranki) approximately

R120m still to do.• Metalong Lesotho

• Phase 1 placed 3rd R375m• Phase 2 placed 3rd R291m• Phase 3 placed 3rd R130m

• Piet se Kop R24m• Bluff Military Base R23m• Thulele/Woodmead R25m

Pipelines outlook 2012 and beyond (cont.)

• PrequalificationsTCTA • Olifants River prequalification JV with Civcon pending

R2bn• Gweru and Kadoma Zimbabwe

• Other prospects• Rand Water Augmentation Budget R4bn• TCTA Mooi Umgeni water transfer scheme R800m• Sasol SNI 26” from Sasolburg to Secunda R400m

• Sasol 12” Secunda R40m• Zimplats pipeline R60m• N10 pipeline Bloemendal R70m

Esorfranki Geotechnical

Geotechnical products and services• Piling

• Lateral Support

• Marine Structures

• Diaphragm Walls

• Ground Improvement

• Dynamic Compaction

• Ground Remediation

• Soils Investigation

•Geotechnical Design

Geotechnical Segment Revenue

Aug 2010R’000

Aug 2011R’000


PBIT 24 820 18 591


No of employees 1 408 1 095

Revenue growth (19,8%) (4,1%)

Operating margins 5,9% 4,5%

Order book 254 089 244 017

Pending awards 190 252 94 775

Prospects 1 480 843 1 246 870


Government 44% 42%* As at 28/02/2010


Geotechnical outlook 2012 and beyond

• Johannesburg current awarded R186m• Kusile current piling work R20m• Kusile ancillary piling work R140m• Village Walk, Sandton R40m• 114 West Street, Sandton R15m• Stella Rise, Old Mutual, Sandton R30m• Rosebank Growthpoint R25m• Other pending R94m• Other key R147m

• Cape Town current awarded R128m• Portside R10m• V & A Clocktower R15m• Other pending R13m• Other key R166m

• Angola current award R38m• Other pending R92m• Other key R253m

Geotechnical outlook 2012 and beyond (cont.)

• Durban current awarded R104m• Other pending R16m• Other key R283m

• Mozambique current awarded R73m• Other pending R15m• Other key R180m

• Tanzania current award R37m• Other pending R25m• Other key R105m

• Mauritius current award R50m• Other pending R5m• Other key R212m

General 2012 and beyond

• Eskom• Medupi Power Station still some housing likely to happen• Kusile Power Station housing and civil works• Nuclear Power Station (announced in the media)• 3rd Coal Fired Station (mooted)• Transmission lines

• Sanral and other roads (15 000km non-toll)• Coal haul-roads upgrades R20bn• Nelspruit Bypass• Non-toll roads budget of R8,6bn in 2011 expected R9,5bn for

2012 from National Treasury

• GFIP Phase 2 (Sanral)• PWV 9 JHB-Pta link west of Ben Schoeman• PWV 5 connects R21 at Olifantsfontein to N1 and on to

Soweto• PWV 14 connects R21 from Easr Rand Mall to M2• K54 is the Pta eastern ring road from Rietvlei to Donkerhoek

on N4

General 2012 forecast and beyond (cont.)

• Transnet (PRASA)• Portnet (Dry docks and general harbour upgrades) • Petronet (Refined product line from Maputo)• Coega

• Refinery• Smelter

• Expansion in resource arena• Iron ore and manganese • Coal• Platinum

• Mozambique Gasline (Temani Gas Fields)• African new markets

• Ghana• Mozambique• Kenya

• Gautrain private development spinoff• Private & commercial developments

CAPEX Segments Financial years

2012 H2 R’000

(Forecast)

2012 H1 R’000

(Actual)

2011R’000

2010R’000

Geotechnical 15 289 14 086 11 793 42 727

Civils 44 759 137 933 17 964 49 711

Pipelines 20 000 - 6 104 3 096

Corporate 2 000 323 14 512 500

Total 82 048 152 342 50 373 96 034

South Africa 82 048 142 565 47 509 58 097

Sub-Sahara - 9 777 2 863 37 937

CAPEX requirements for 2012

• Geotechnical – nothing specific

• Civils – site specific (hire where possible)K71/R55 (24 months)N4 (30 months)Kusile Civil works (30 months)

Kusile crushing and fill (15 months) Mocambique (5 years)

Maintenance capex

• PipelinesWestern Aqueduct (48 months)Maintenance capex

New 65-tonne excavator

Tippers for the N4

Crushers on the N4

GROUP GEOGRAPHICAL SEGMENTS

South Africa

(R’000)

Africa(R’000)

Total(R’000)

Segment revenue 714 633 142 891 857 524

Profit/(loss) before interest and tax

(33 219) 18 804 (14 415)

(Loss)/profit after Tax (33 096) 14 419 (18 677)

Segment assets 1 300 919 411 955 1 712 874

Order book 1 732 010 63 579 1 795 589

No of employees 2 928 196 3 124

Operating margins (4,6%) 13,1% (1,68%)

Non-government 39% (42% FY 2011)

Government 61% (58% FY 2011)

GENERAL

• Mega projects

• Africa

• Succession planning

• Challenges• Protracted awards/funding• Competition and margin squeeze• Angolan liquidity• Working capital pressure• Lack of private investment spend

CONCLUSION•The Esorfranki group is aware that trading conditions will continue to be tight going forward

•We will continue to experience margin squeeze

•We are aware that Government’s planned spending is under pressure through decreased revenue streams and funding constraints

•Africa remains a difficult but opportunistic market for the group

•Notwithstanding these conditions and restraints our management team believes we have the acumen and the wherewithal to steer the group successfully through these troubled times.

CONTACT DETAILS

+ 27 83 259 2584

+27 11 776 8700+27 11 822 1158

[email protected]

Bernie Krone| CEO

+ 27 84 556 2486

+27 11 776 8700

+27 11 822 1158

[email protected]

Wayne van Houten| CFO

Esorfranki Limited | 30 Activia Road Activia Park Germiston 1401 PO Box 6478 Dunswart 1508 South Africa

Documents

REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 ST AUGUST 2011