Roy Cokayne
Listed civil engineering group Esor fell more than 40 percent on the JSE yesterday on news that it expected to report a loss in earnings in the year to February, primarily because of losses totalling R166 million on three contracts.
It said yesterday that it incurred a loss of R94m in the year on the Bakwena N4 toll road contract, a R45m loss on Anglo Thermal Coal’s Kriel project and a R27m loss on the Hwelereng road contract for in Limpopo.
Esor said it expected to report a headline loss a share for the year of between 10.3c and 12.3c compared with headline earnings a share of 20.5c in the previous year.
The basic loss a share was expected to be between 39.6c and 47.4c compared with earnings a share of 23.5c in the previous year.
Esor disclosed the loss-making contracts in November when it published its interim financial results and stressed at the time these contracts would be concluded in the following six-month period.
The company also has an unsettled claim against Eskom for a contract at the Kusile power station project.
Esor said its civils division was involved in a number of power infrastructure projects for Eskom at Kusile with the terrace underground facilities contract having been subject to various delays and lack of access in a number of areas. It said the group’s liquidity would remain tight until all claims were resolved and payments due on the project had been made.
Esor added that the group’s work on hand and future pipeline remained healthy, with a secured two-year order book in excess of R2.6 billion at the end of February.
Shares slumped 40.82 percent to close at 29c on the JSE yesterday.