South African construction and engineering group Basil Read reported better-than-expected results for the year ended December 31, 2003, with an increase of R30,7-million in pre-tax profit, compared to the previous year.

This is, the group said, was mainly due to a profit of R28,4-million realised on the sale of the its investment in Trans African Concessions and a gain on forward exchange contracts of R28,1-million, included in net finance income of R14,1-million.

In 2003, Basil Read did not escape the trend of challenging cross border contracts.

In October, the group was reluctantly compelled to terminate a road contract in Mozambique, due to lengthy payment delays by the employer. These have subsequently largely been settled with the full financial impact of this termination having been provided for in the period under review.

The also said that its activity was low in relation to its overheads for the period under review. A strategic decision to reposition the group was taken during 2003, resulting in the overhead structure being addressed in the last quarter of the year.

This decision has resulted in the group being able to improve its competitiveness, the benefit of which is evident by the group’s improved result during tendering.

"We have continued to invest in plant and equipment in support of new contracts. Since year-end, Basil Read has secured contracts to the amount of R413-million. At the reporting date, Basil Read had issued guarantees in the amount of R275,6-million," the company added.

The opencast mining division continued its satisfactory performance and secured its fourth contract for the openpit mining of the UG2 reef for Lonmin Platinum, and the conclusion of the ramp-scavenging contract for Palabora Mining, in December 2003.

The roads division continues to operate successfully with two of its contracts, namely N3 Hilton rehabilitation and Bethal P30-1 portion D, concluding in the latter part of 2003.

Operations continue on the upgrade of a section of the N4 toll road in Mozambique, as well as the rehabilitation of a 116 km of road in the Caprivi Strip, near Katimo Mulilo, in Namibia.

The building division completed the next phase of a housing development in Alexandra, in the second half of 2003, and is currently, along with the company’s empowerment partners, active on the construction of a hospital in the Eastern Cape.

Basil Read continued its empowerment initiatives, with the group’s empowerment partners enjoying steady growth.

The 2004 year has had a promising start, with the group’s roads division having secured projects in the Limpopo Province and in Uganda, and with further prospects nearing finalisation for the opencast mining division, in Botswana.

On the civil engineering side, the group is a member of a consortium (Odebrecht, Basil Read, Ceccon) that has been prequalified as one of three tenderers on the Berg River Dam project, in the Western Cape.