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IST Group Limited - IST Stakeholder Letter July 2002
IST Group Limited
Reg no. 1998/011521/06
ISIN no. ZAE000015798
Share code : IST
As we approach the halfway mark of the current financial year, I am happy to
report that the group`s businesses are generally in good shape. In addition,
there have been a number of very positive developments at the operational level
in recent weeks.
Repositioning of IST Industrial gets results
Following the establishment of IST Nuclear Systems last year to accommodate the
group`s further involvement in the Pebble Bed Modular Reactor project, IST
Industrial was repositioned around its traditional business as a multi-
disciplinary engineering contractor, designing and supplying technologically
advanced systems and plants for mining and industry. The refocusing of the
business is producing the desired results and is reflected in a strong surge in
its volume of work. This includes a R50 million turnkey contract for the
upgrading and expansion of the compressed air system at the Hillside aluminium
smelter which IST Industrial was recently awarded. The multi-disciplinary
contract is being fast-tracked, with air from the new compressors scheduled to
be available by June 2003 and the entire project is due for completion by the
end of that year. IST Industrial is currently also engaged in a R30 million
turnkey contract for the doubling-up of the compressed air plant at the Mozal
aluminium smelter as well as the construction of an off-gas cleaning plant at
the Bayside smelter.
IST Telecom tops Telkom SA quality ratings
At a Telkom function held last month, IST Telecom clinched the annual award for
the supplier with the best performance in the quality category. Considering
that Telkom has more than 10 000 suppliers, this is a very considerable
achievement. For the second year running, IST Telecom also received an overall
silver rating from Telkom. As you may have seen in the press, it has just
gained a contract to supply its UMC 1000 access multiplexers to Rodcor
International for the roll-out of a new optical fibre-based telephone network in
Swaziland. The Swaziland contract is the first success in a recently launched
drive to extend and diversify IST`s market for this equipment. Overall,
however, the telecoms market remains soft in Southern Africa as well as
worldwide.
Global partner for IST Energy
We hope that we shall soon be able to announce the details of an alliance
currently being finalised between IST Energy and one of the world leaders in the
field of power engineering. The new alliance is designed to ensure that IST
Energy has the world-class products to compete effectively as it seeks to expand
its presence in African and Middle Eastern markets. At the same time, it will
enable us to offer the local power systems market the latest international
technology, backed by strong on-the-spot support. Meanwhile, IST Energy has
had its national contracts for the supply of remote terminal units and post-
mounted remote terminal units extended by Eskom Distribution. IST Energy`s
national contract for transformer protection has also been renewed by Eskom
Transmission, and it has won new national contracts for the supply of RTUs for
transmission substation control system applications and for transmission bus
coupler protection and control systems.
PBMR project gets green light from environmentalists
One of the key issues in the development of the PBMR project is the
environmental impact assessment and approval process which we hope will be
completed before the end of this year. The process recently took a big step
forward when the consortium of independent environmentalists investigating the
establishment of a Pebble Bed Modular Reactor industry in South Africa
recommended that the government should authorise the implementation of the
project, subject to certain conditions. The consortium`s report said it could
not identify any significant environmental risks and impacts that could not be
adequately managed and mitigated. Meanwhile, the PBMR project team`s report on
capital cost reductions in the power plant as well as the reduction of fuel
manufacturing costs is due in August this year.
JSE sector change
As part of the move to the FTSE sector classification system, the JSE moved the
IST listing from the Electronic and Electrical Equipment sector to Software and
Computer Services. IST is of the view that the listing in Software and Computer
Services does not reflect the nature of our business and has therefore begun a
consultation process with the JSE to have our sectoral listing reviewed.
Future engineers see IST group in action
IST bursars from the University of Pretoria and local technikons visited our
head office recently for a presentation by top management on the group`s
operations. The exercise was designed to enhance the bursars` understanding of
IST`s business activities, people and skills, and at the same time to provide
management with an opportunity of getting to know the students.
The bursars form part of IST`s corporate social investment programme, which
internally addresses the continuous development of the group`s own staff and
externally supports the training of future engineers from previously
disadvantaged communities. It also invests in the education of disabled
students. IST currently sponsors eleven PDI bursary students, most of them
studying towards an engineering degree at the University of Pretoria. In
addition, it provides 24 scholarships at Pretoria Boys` High to PDI pupils who
show particular promise in mathematics or science.
Publication of interim results
IST`s results for the six months to August 2002 will be published in the media
as usual on or about 20 October. We are always happy to answer questions from
shareholders and investors - subject, of course, to the usual disclosure rules
- and you should feel free to contact us if you want further information about
the group.
Harry Coetzee
Chief Executive
9 July 2002
Date: 09/07/2002 12:11:00 PM Produced by the JSE SENS Department
