Australian roads upgrade project drags down WBHO’s FY earnings

Construction engineering company, WBHO has seen headline earnings per share decrease by 34 per cent due to challenges faced in various regions, particularly the Western Roads upgrade project in Australia. Despite the setbacks, WBHO Chairman, Mike Wylie remains optimistic about the company's performance and the broader economic outlook in South Africa. In a recent interview on CNBC Africa, Wylie reflected on the tough year and shared insights on the company's achievements, challenges, and future prospects. Wylie highlighted that WBHO's turnover exceeded 40 billion this year, signaling growth in various sectors, except for the Western Roads project in Australia. He commended the company's performance in building and road projects in South Africa, despite slight profit decreases, attributing it to a lack of available work in the current economic climate. However, Wylie mentioned that the order book for the next year has shown an increase, offering a positive outlook for future projects. When asked about margins and prospects in South Africa, Wylie expressed realism, stating that while margins may not reach the levels of the past, they are sufficient to provide returns to shareholders. He noted an improvement in work opportunities from state-owned enterprises like EXER, ISKIM, Sanrail, and Transnet, indicating a positive trend in the construction sector. Wylie also expressed confidence in reduced corruption within state-owned enterprises, suggesting improved governance practices in the sector. Regarding the global environment, Wylie acknowledged signs of recovery in the private sector, particularly in the mining and energy industries in southern Africa. He addressed the challenges faced in the Australian project, emphasizing the lessons learned and the need for better execution in the future. Despite the setbacks, Wylie believes that the worst is behind them and is hopeful for better results in the coming year. When discussing South Africa's economic outlook, Wylie remained cautiously optimistic, pointing out that the country may take at least two years to address its debt issues and achieve significant growth. He stressed the importance of political stability and certainty to attract investment, highlighting the upcoming investment conference as an opportunity to showcase the country's potential. While acknowledging the challenges ahead, Wylie believes that South Africa is on a path towards positive transformation, albeit at a gradual pace. In a personal reflection on his career, Wylie announced his retirement from WBHO after 45 years of service. He expressed confidence in the company's future leadership and his anticipation of a well-deserved break from the demanding construction industry. As he prepares to step down, Wylie looks forward to pursuing personal interests and spending time with his family, marking the end of an illustrious career in the engineering and construction sector.