The group sunk to a 70.12 cents per share headline loss compared with the 67.51c profit the previous year, while revenue was down by 5percent to R9.89billion.
The loss for the year reduced to R111.3 million from R547m the year before. In an interview, group chief executive Willie Meyburgh said there was an increase in delayed payments from clients.
“This business unit's results were impacted by the liquidation of a South African mining client, and the under-performance of a project in the Roads & Earthworks division. However, the Zambian and Swaziland divisions delivered good results. Periodic payments are being received. In Nigeria and Zambia work will only recommence on affected contracts once all outstanding amounts have been collected,” he said.
Construction & Mining's contract revenue increased to R5.3bn from R5bn the year before, though operating profit still fell to R112m from R166m in the previous period.
The dispute with the unnamed entity sapped the group's liquidity as it required making provision for funding through a combination of specific ring-fenced project financing, realising equity in some properties and, only if required, a possible fresh issue of shares.
“The first part of the funding plan, being the specific ring-fenced project financing, has been secured,” Meyburgh said.
Cash generated from operations in the year increased to R361m.
The group saw a reduction in working capital of R246m from a R293m increase in 2018, while overall cash decreased to R881m from R916m in 2018 due to the repayment of R242m of liabilities.
Challenging conditions saw to the reduction of the building business unit's contract revenue to R3.4bn from R4.4bn the previous year and as a result of the provision raised in terms of IAS 37, the operating loss increased to R251m from R4m the previous period.
“The Mozambique and Coastal divisions continued to deliver good results, but delayed payments from developers working for government in the social housing sector further impacted the business’s cash resources. The Mechanical and Electrical business unit’s turnover increased to R1.2bn from R1bn,” Meyburgh said, explaining that a claim against the Oil and Gas division by an international client, having been settled under duress for R38m, resulted in the business unit declaring an operating loss of R19m from a R13m profit in 2018.
Meyburgh said the group was also competing for some contractual claims and compensation events on a large public sector power project locally.
“We have provided R263m for potential unrecoverable site management costs to complete the project,” he said.
Including this provision, there was an operating loss of R158m (R506m), excluding results from the UAE operation, which contributed R66m (R48m) towards the share of profit of equity accounted investees. There would have been a R104m operating profit, if this provision was excluded, he said.
Headline earnings per share in the comparative period were impacted by the reversal of impairment charges relating to assets.
The order book amounted to R11.5bn, of which 43 percent was cross border - at this time last year the order book was at R13.7bn. Capital expenditure fell to R109m from R500m in the prior year.
Stefanutti shares closed 4.17percent lower at R1.15 on the JSE yesterday.