JSE-listed Esor aims to bounce back in a tough market with a higher-value order book and a revamped civils unit, as labour unrest and legacy contracts pushed earnings into the red during the year to February 2014.

The civils and construction company posted a headline loss a share of 11.3c during the 12 months under review – a 155% drop compared with headline earnings a share of 20.5c reported the year before, while earnings a share deteriorated from 23.5c in 2013 to a loss a share of 43.5c in 2014.

Esor’s civil unit had been weighed down by three lossmaking contracts – resulting in an operating loss of R134-million – of which the Kriel and Hwelereng projects were completed post year-end, with the N4 Bakwena project expected to conclude by August.

Labour unrest in the mining sector had also impacted productivity on most of the civil division’s sites and further hampered performance in a “tough trading environment”.

The group delivered a loss after tax of R166-million during the year to February compared with a profit of R87.7-million during the financial period to February 2013, as Esor’s overheads jumped to R127-million – up from R69-million in the year before.

"[The 2014 financial year] has been a bit more torrid than we thought, but we are now through the worst of it,” Esor CEO Bernie Krone told long-suffering investors at the group’s results presentation in Sandton.

Revenue from continuing operations remained stable at R1.5-billion, mostly owing to 79% revenue growth to R580-million within Esor’s pipeline unit and the contribution of R63-million revenue from the company’s newly established developments division, said CFO Wessel van Zyl.

Revenue from the civils division contracted from R1.2-billion to R961-million.

The group remained focused on consolidating its embattled civils unit and building its new developments business and said it was now positioned on a firmer financial footing and poised for growth in the coming year.

The order book stood at R2.6-billion – an 18.6% rise on the prior year – with civils accounting for R1.2-billion in contracts and R552-million in pending projects.

The pipelines unit reported an order book of R654-million with pending contract awards valued at R351-million. Further opportunities were expected to emerge from sanitation projects throughout the country and in specific regions in Africa.

The new developments division had already secured four projects, two of which were under way, and an order book valued at R725-million. The unit’s pending awards stood at nearly R900-million, but Esor believed the new unit had the potential for an order book valued at more than R4-billion.

Esor did not declare a dividend for the year to February.