Stefanutti Stocks Holding remains confident in the construction sector in which it operates, despite the fact that the South African construction market continues to be challenging. Photo: Simphiwe Mbokazi/ANA

JOHANNESBURG - JSE-listed Stefanutti Stocks Holdings share price rose 20.75% on the JSE after the group released a trading statement in which it indicated that it expected an increase in operating profit for the six months to August.

“The group will report an increase in operating profit compared with the prior period. This increase has, however, been impacted by an increase in the effective tax rate,” the group said yesterday. The share price closed at R3.20 at the end of the day. As a result of this increase in operating profit, the group expected its interim earnings a share and headline earnings per share to decline.

The group said the earnings a share and headline earnings a share were expected to be between 10percent and 20percent lower than the corresponding period, translating into interim earnings per share of between 44.46cents a share and 50.01c. 

Last year, the group reported 55.57c in earnings a share while the headline earnings a share was expected to be between 42.19c and 47.46c as compared to 52.73c. The group said the financial information on which this trading statement was based had not been reviewed or reported on by the group’s auditors.

The results for the six months to August were expected to be released on November 9. Stefanutti Stocks is one of South Africa’s largest multidisciplinary construction companies with an order book of R14billion, of which R4.4billion arises from work beyond South Africa’s borders at the end of February.

The group operates in South Africa, sub-Saharan Africa and the United Arab Emirates. It is involved with concrete structures, marine construction, piling and geotechnical services, roads and earthworks, bulk pipelines, open-pit contract mining and surface mining-related services.

In the year results to end February, the group reported that capital expenditure for the year amounted to R272million, up from R157m reported last year, of which R156m related to the mining services operation. The group said of the total capital expenditure, R186m was incurred in maintaining capacity.

Revenue declined 6percent to R9.2bn as earnings before interest, tax, depreciation and amortisation increased 62percent to R209m.

The group was confident in the construction sector in which it operates despite that the South African construction market continues to be extremely challenging as there remains potential growth in certain sectors of the market.

“These include mining surface infrastructure, marine, petrochemical tank farms, water and sanitation treatment plants, and residential and mixed use building projects. These will provide opportunities for all our business units, both locally and cross border,” the group said.

- BUSINESS REPORT