Gupta-owned Oakbay distances itself from government deals

Oakbay Investments on Thursday announced its maiden annual results‚ trumpeting a growth in private sector contracts and stating only 8.9% of revenue came from government business.

Nazeem Howa‚ Chief Executive of Oakbay Investments‚ said: “I hope this will help audiences understand our operations and dispel some of the myths that have been built up about our Group – especially the myth that we are heavily reliant on Government business‚ when nothing could be further from the truth”.

Group revenue in the year to end February increased by 7% to 2.62 billion Rand (2015: 2.44 billion Rand).

Government contracts accounted for 8.9% of the Group’s revenue‚ the company stated.

Oakbay said its mining division contributed 1.17 billion Rand of revenue and is the Group’s largest division (44.5% of revenue).

“Mining division’s largest company is JIC Mining Services‚ a loss-making business prior to Oakbay’s acquisition in 2006. JIC has never had a government contract‚” the company stated.

Sahara is the second highest contributor to the Group reporting 1.1 billion Rand of revenues‚ equal to 44% of Group revenue.

“Sahara also does not have any government contracts‚ following a deliberate decision taken by its Board in 2008‚” the results statement said.

Oakbay said its Brakfontein coal mine received its water use licence in December 2014‚ enabling it to commence mining and supply Eskom with coal from April 2015. “This is the first time that any Oakbay business has mined coal and is a major milestone for the Group.”

For the period‚ Brakfontein supplied 1.49 million mt of coal to Eskom. “This constituted just 1.25% of Eskom’s total coal supply.” Oakbay’s 29% share in Tegeta equates to 0.43 million tonnes of supply and just 0.36% of Eskom’s total coal supply. This coal was sold to Eskom at a rate of of c. 270 Rand a ton.

Oakbay’s media businesses‚ The New Age and ANN7‚ are profitable and through innovative new platforms‚ such as the ‘TNA Business Breakfast’ with SABC and ANN7’s ‘SA Decides’ programmes‚ both have grown revenue for a mix of government and private sector advertising and sponsorships‚ it said.

Howa stated: “We’ve been around for 20 years now in South Africa and in that time have grown from just eight employees to almost 8‚000 today. We also paid R141 million as Corporate Income Tax for the financial year. Both the workforce we sustain and the taxes we pay benefit the South African people. I honestly believe that we are a force for good in this country and we look forward to continuing to grow our business and create more jobs for our country – it is what South Africa desperately needs.”