Lonrho expects further growth after Q3 revenues jump 45%

Africa focused investment group Lonrho (LON:LONR) achieved a year-on-year turnover increase of 45% in Q3 as all businesses expanded with divisional revenues increases ranging between 20% and 118%, and it now expecting to duplicate this success in the remainder of 2010 and in 2011.

Quarterly revenues for the period to end-June 2010 jumped 45% to £26.8 million, bringing the total for the first three quarters to £74 million, which is a 23.4% improvement over the equivalent period of the previous year.

After making a loss of £2.4 million in Q3 2009, Lonrho achieved a positive EBITDA (earnings before interest, taxes, depreciation and amortisation) of £1.5 million. EBITDA for the year to date amounted to £4.3 million, compared to a £7 million loss at this point in 2009.
Losses for the year to date shrank from £6.2 million in 2009 to £2.5 million.

The operational highlights of the quarter included the opening of the 197 room Hotel Grand Karavia in Lubumbashi in the DRC (Democratic Republic of Congo), the purchase the remaining 49% of of agri-processing company Rollex and the acquisition of Trak-Auto, the John Deere tractor and Komatsu equipment dealership in Mozambique.

Revenues at the Agribusiness division rose 39% year on year to £13.7 million and by 14.9% for the first nine months. Back in June, the company bought African seafood supplier Oceanfresh Seafoods, aiming at expanding the operations of Lonrho Agriculture into new markets including the US, later winning a contract from Costco to ship seafood to Los Angeles.

The Transport division has achieved a revenue growth of 23%, raking in £4.8 million during the quarter to bring the nine month total to £14.6 million. Infrastructure revenues soared 118% to £4.3 million, revenues at the Hotels business jumped 61% to £1.4 million, while the Support Services division made £2.4 million in revenues, marking a 20% year on year improvement.

Lonrho offered an upbeat outlook, saying it was expected the strategic acquisitions made during the quarter, which includes Oceanfresh Seafoods, to add value to the group’s divisions and deliver a further boost to revenue growth through the year end and in 2011.

“Lonrho continues to deliver on its core strategy of investing in, and growing businesses with focused synergies to the core economic drivers of Africa; Oil, Agriculture and Minerals...having completed, or nearly completed the investment phase in many of the businesses the company can be confident that the last quarter of 2010 and 2011 will reflect the strong foundations for growth that have now been successfully established,” said executive chairman of Lonrho David Lenigas.