CONSTRUCTION group Stefanutti Stocks said yesterday that it would continue to focus on its restructuring, seek to achieve favourable outcomes on the Kusile Power Project contract processes and return the group to profitability.
This was according to CEO Russel Crawford, who commented on the group’s results for the year to February 28. Contract revenue from continuing operations increased to R6bn from R4.7bn, while the operating loss widened to R99 million from R55m in 2021.
A normalised operating profit of R198m excluded abnormal and non-operational items such as restructuring costs, legal fees, fair value adjustments and impairments of assets and a provision relating to the City of Cape Town claim settlement.
The earnings and headline loss per share came to 248.27 cents (171.62 cents) and a loss of 97.07 cents (155.13 cents) respectively.
The order book was at R5.3bn, R1.7bn of which was from work beyond South Africa’s borders.
Cash consumed from operations came to R253m (R209m), negatively impacted by restructuring costs, legal fees and the repayment of excess billings over work done.
Crawford said the group’s results continued to be negatively affected by Covid-19 and the slow adjudication and award of tenders, especially in the public sector – this was having a significant impact on holding costs in the group.
After year-end, an offer of $13.5m was received to purchase a foreign entity. Negotiations were ongoing.
The Inland division’s contract revenue from operations came to R2bn (R1.7bn) with an operating profit of R86m (R26m). Included within operating profit was an impairment loss of R21m and fair value adjustments of R11m (R8m) relating to revaluation of land and buildings, and plant and equipment, respectively.
Excluding these, the operating profit was R118m (R34m).
Crawford said the Civils and Roads & Earthworks disciplines were profitable and performing to expectation. The former Gauteng Building division, now part of the Inland Region, had been right-sized due to a declining order book.
Order books for the Materials Handling and Tailings Management disciplines were being rebuilt as a sale process did not materialise.
The Contract Mining discipline was wound down in October 2021 and was disclosed as part of discontinued operations.
The Coastal Region’s contract revenue came to R1bn (R935m) with an operating profit of R3m (R7m operating loss), negatively impacted by civil unrest during July 2021.
“Opportunities continue to exist for this region in transport infrastructure, water and wastewater treatment plants, and in the private sector commercial, retail and industrial projects,” said Crawford.
Coastal’s order book at February 2022 was R1.1bn (restated Feb 2021: R741 million).
Western Cape Region (Building, Civils) Western Cape’s contract revenue came to R1.1bn (R535m) with an operating profit of R54m (R4m).
“The building discipline outperformed, exceeding expectation,” said Crawford.
Opportunities exist for this region in water and wastewater treatment plants, and in the private sector commercial, residential, retail, industrial plants, warehouses and data centres.
Western Cape’s order book at February was R658m (R910m).
The Africa Region’s contract revenue came to R1.6bn (R1.2bn) with an operating profit of R102m (R73m).
The Eswatini operation outperformed and exceeded expectation, with Zambia and Botswana operating profitably.
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