Esor returns to FY profitability
Civils and construction group Esor on Thursday posted a return to profitability for the year ended February 29, 2016, after a “painful” restructuring that set the JSE-listed group on a more stable path for recovery and growth.
Esor swung to a profit of R3.7-million for the year under review, from a loss of R99.9-million in the prior year.
Headline earnings a share for the 2016 financial year were 14.4c, compared with a headline loss a share of 18.8c in 2015, while the basic loss a share of 26.4c posted in the prior year was reversed into basic earnings a share of 1c.
“Overall, we were profitable, but the year was one of two halves. The first six months progressed relatively well in a tough economy; the second presented us with clients going into financial distress, costly quality issues on the Northern Aqueduct project and the December builders’ holiday,” noted Esor CEO Wessel van Zyl.
However, presenting the results in Sandton on Thursday, he assured that the company intended to remain profitable, despite a difficult trading environment.
During the year under review, revenue remained flat at R1.44-billion owing to the restructuring, delays in general contract awards and the impeded roll-out of the Diepsloot mixed-use development.
The restructuring saw the reorganisation of activities into two core divisions, namely Esor Construction and Esor Developments, while support functions, including health, safety and environment, tendering, commercial, plant and yard and finance, were centralised.
Post year-end, Esor Construction was further regionally divided into inland and coastal, each still focusing on five product lines, namely infrastructure, pipelines, pipe services, building and housing and sanitation.
“This move will enable the group to focus on all product lines in all regions of Southern Africa and so opens [up] new geographic markets,” said Van Zyl.
Meanwhile, Esor’s order book stood steady at R1.7-billion, with 86% secured revenue from national, provincial and local government and parastatals.
During the year to February, Esor’s cash flow improved 16.7%, which enabled the group to repay R96.1-million in debt and decrease its gearing to 15%, with cash-on-hand of R42.4-million in February.
Esor did not declare a dividend for the period.
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