Brikor posts net loss as bricks revenue rises but coal revenue falls

27th May 2022 By: Schalk Burger - Creamer Media Senior Contributing Editor

JSE-listed bricks manufacturer and coal supplier Brikor, for the financial year ended February 28, reported the highest revenue in five years in its bricks segment, at R195.1-million.

That represents a 34.6% year-on-year increase in revenue for the bricks segment.

The revenue of its coal segment, however, decreased by 31.3% to R77.6-million.

The group reported a total equity increase of 39.5% to R112.3-million, up from R80.5-million in the 2021 financial year, and a 29.1% increase in net tangible asset value a share to 10.2c a share.

The Brikor Group made a net operating loss before interest, taxation and earnings from its associate of R300 000, compared with the operating profit before interest and taxation of R21-million achieved during the 2021 financial year.

No dividends have been declared for the year under review.

“The bricks segment performed exceptionally well during the reporting period on the back of an increase in do-it-yourself projects, additions and alterations, as well growth in the informal building sector.

“Brikor’s focus on planning, optimal inventory levels and production efficiencies paid off. A year-on-year comparison should take into account the significantly lower revenue during 2020 following the Covid-19 pandemic - there were no or limited bricks sales for two months,” said Brikor CEO Garnett Parkin.

The coal segment experienced significant pressure on sales prices and demand during the first quarter, which stabilised later in the year. Adding to this pressure, rainfall during the last quarter at the mine was at a five-year high and exceeded normal yearly rainfall figures.

“While coal has produced a poor performance for the reporting period, there has been a significant improvement subsequent to the financial year-end. Sales are already dramatically higher compared with the same period in 2021, and we are working to ensure that we have sufficient coal stock to meet increased market demand,” Parkin noted.

Further, the production capacity of the coal segment has been bolstered by the acquisition of a mining right of 96 ha in the Grootfontein prospecting area, which was granted in December 2020 and executed in July 2021.

“We remain confident that there is further potential to be unlocked within the Brikor group to create value for stakeholders during the next financial year,” Parkin said.