JSE-listed Brikor reports exceptional revenue in bricks business while coal slumps then improves


Friday, 27 May 2022: Manufacturer and supplier of bricks and coal, Brikor Limited (JSE: BIK) reported the highest revenue in five years in its bricks segment, which is up 34,6% to R195,1 million compared to last year (2021: R144,9 million). However, Brikor’s coal segment revenue fell by 31.3% to R77,6 million (2021: R113 million) in the year ended 28 February 2022.

The group reported a total equity increase of 39,5% to R112,3 million (2021: R80,5 million) and a 29,1% increase in net tangible asset value per share to 10,2 cents per share (2021: 7,9 cents per share). The Brikor group made a net operating loss before interest, taxation and earnings from its associate of R300 000, whereas it had reported an operating profit before interest and taxation of R21 million in 2021.

Brikor CEO Garnett Parkin says that the R12 million profit reported in 2021 included the reversal of a significant provision of R8 million and that this should be taken into account when comparing year-on-year profits.

“The bricks segment performed exceptionally well during the reporting period on the back of an increase in DIY 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,” he says.

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 annual 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 to the same period in 2021 – in fact we are working to ensure that we have sufficient coal stock to meet increased market demand,” says Parkin.

Production capacity of the coal segment has been bolstered by the acquisition of a mining right of 96 hectares 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,” concludes Parkin.

No dividends have been declared for the year ended 28 February 2022 or 29 February 2021.