PRETORIA – Group Five expects to make a loss of R1.3 billion in its 2018 financial on its $410 million independent gas- and oil-fired combined-cycle power-plant contract in Kpone, Ghana.
This contributed to the further group losses the listed construction and engineering group incurred in the second half of its financial year.
Group Five said yesterday that it incurred these further losses despite benefits being realised following the restructuring and the rationalisation programmes implemented in the financial year.
It said the main reasons for these further losses were additional losses on the Kpone contract; its construction business in South Africa continuing to be impacted by weak market conditions, with some contract awards not materialising or secured contracts materialising later than anticipated and impacting overhead recovery, and cost overruns on a few ongoing contracts; and South African engineering, procurement, construction (EPC) contracts trading behind forecast despite being profitable.
Group Five expects to report a headline loss a share of between 1 300c and 1 450c for the year to June, which represents an increased loss of between 52.4 percent and 70 percent on the 853c headline loss a share reported in the previous year.