ICT services provider, EOH says that its financial performance has remained resilient over the last quarter, despite downward pressure as a result of the lockdown in South Africa.
The group said that revenue came under pressure during the quarter ended April 2020, but it delivered a positive EBITDA “as a result of the focus by management on costs and the elimination of unnecessary spend”.
EOH also reported positive cash generation from operations for the quarter.
The group said it has continued to see good collections from its debtors book for the months of February, March, April as well as May with all months recording collections in excess of R1 billion. “As at 3 June 2020, the group had cash balances of R893 million, while also deleveraging in line with its strategy.”
As noted at the half year results presentation, EOH said it has agreed to a R1.6 billion deleverage plan with its lenders.
On the back of the group’s improved financial performance for the quarter combined with the recent sale of the remaining 30% stake in Construction Computer Software, the group said it has achieved its first capital repayment milestone having repaid R540 million of the R1.6 billion.
This is in excess of the R500 million agreed with lenders and well ahead of the 31 August 2020 deadline, it said.
The group has repaid R1.77 billion to its lenders – R1.140 billion in capital, and R626 million in interest.
EOH said it continues to service its interest obligations to the lenders and paid R75 million of interest during May.
The group has also looked to deleverage its balance sheet primarily through the sale of non-core assets. Since 1 February 2019, EOH has signed agreements for the disposal of non-core assets in excess of R1.4 billion, receiving a total of R865 million in cash to date.
The sale of Dental Information Systems Holdings signed for R250 million has been approved by the Competition Commission without any conditions and is now before the Competition Tribunal awaiting approval.
“The sales processes for two of the IP assets are ongoing and are in the final stages with bidders. Additionally, the sales process for the third IP asset was launched in May 2020, with significant interest received from various bidders,” it said.
Additionally, EOH said it has been able to reduce its liabilities for acquisitions from R204 million at the end of January 2020 (R634 million at 1 August 2018) to R114 million as at the end of May 2020.