Three loss-making projects in Africa were largely responsible for pushing listed civil engineering group Protech Khuthele into a loss in the year to February.
Antony Page, the group’s chief executive, said yesterday that all the abandoned projects had been undertaken by the group’s contracting division, with two of them in Tanzania and the third in the Democratic Republic of Congo.
Page declined to comment on the total value of the impairments related to these three projects, which did not progress beyond the first phase, stressing the group had not disclosed this and would rather not.
However, Page confirmed that these impairments were “sizeable and would make the group’s results look very different”.
Page said the group had withdrawn from these projects and its remaining projects in Africa were all profitable. Its projects in South Africa had always been profitable and there was no reason why it should not show a profit in the current financial year.
Protech Khuthele yesterday reported a headline loss a share of 1c for the year to February, compared with headline earnings a share of 11.8c in the previous year. Group revenue dropped by 10 percent to R965.8 million from R1.1bn.
Page said the decline in revenue was in line with the tough prevailing market and the challenge of starting up projects in Africa.
The group reported an operating loss before interest and taxation of R3.8m, compared with the operating profit of R77.1m in the previous year.
A dividend was not declared.
The group’s contracting business unit accounted for 84 percent of group revenue despite its revenue declining by 8 percent to R865.8m. The geotechnical business unit increased revenue by 24 percent to R23.4m and operating profit nearly doubled to R7.1m from R3.6m.
The readymix business unit grew revenue by 8 percent to R139.4m and turned an operating profit of R5.5m compared with a previous R1.5m loss.
Page said the group had seen evidence of improved tender activity since the beginning of the new financial year, both in the mining sector and commercial infrastructure, and the renewed commitments from the government to accelerate infrastructure investments were encouraging.
The company’s shares were unchanged at 58c on the JSE yesterday.