Stefanutti reduces its loss to R249.3m in six months to end August
CAPE TOWN - STEFANUTTI Stocks Holdings has reduced its loss to R249.3 million in the six months to end August from R1.04 billion during the corresponding period last year.
The group, which is one of the remaining construction companies capable of taking on mega projects, said yesterday that its contract revenue fell 43 percent to R1.66bn due to the impact of adverse market conditions and the pandemic.
Stefanutti said that the operating loss of continuing operations reduced sharply to R169.2m from R909.2m last year. It said its headline earnings per share improved 79 percent to a loss equivalent to 128.42 cents from 607.72c previously.
The group said that it made progress in reconfiguring its organisational structure to improve operational performance, and to decrease overhead costs, including the reduction of the headcount.
It said the overall restructuring plan included the sale of non-core assets, including business units, internal reconfiguration, securing of additional short-term funding of R430m and a favourable outcome from contract claims on the Kusile power project.
The group said it also managed to restructure its short-term funding into a term loan and was optimising the business model and capital structure, including the potential of raising new equity.
It said lenders provided funding and converted the short-term funding agreement into a term loan on July 1 – the loan terminates on February 28, 2022.
Stefanutti said the lenders had also agreed to support current and future projects undertaken by the group.
“This is an ongoing process which continues as the fluctuating aspects of the restructuring plan are being implemented,” directors said.
In July, Stefanutti flagged that its liabilities had grown bigger than its assets. The group said it had sunk deeper into the red after having to raise hundreds of millions of rand to finish work on soured contracts at Eskom’s Kusile power station.
Stefanutti, which plans a massive restructuring until February 2022, said its loss had widened to R1.07bn in the 12 months to February 29, compared with the R111m loss reported at the prior year.
Yesterday, the group said it had implemented the restructuring plan to arrest the losses it incurred in February.
It however did not disclose further details of the contract claims on the basis that it may prejudice its position in them.
Stefanutti said the United Arab Emirates operation contributed R6m (August 2019: R15m) towards the share of profits of equity-accounted investees.
It said its order book for continuing operations was currently worth R7.4bn, of which R3.1bn arose from work beyond South Africa’s borders.
The group said its operations in certain areas of South Africa continue to be disrupted by certain communities and informal business forums.
Stefanutti shares rose 6.45 percent on the JSE yesterday to close at R0.33.