Engineering infrastructure group Racec’s JSE share price surged on Wednesday, as it announced that it expected the group to return to profitability by September 30, this year.

Its share price rose to a high of 45c a share, compared with 30c a share at Tuesday’s close, but ended the day at 32c a share, up 6,67% on Tuesday’s close.

Racec recorded a net loss of R2-million in the six months ended March 31, 2010, compared with a net profit of R7,5-million the year before.

Delays in the start of two projects, worth a combined R140-million, in its Racec Electrification division, as well as significant losses made by its Greenbro subsidiary, had led to the loss, the group stated.

However, it stated that the performance of the group in the six months had been a significant improvement on the headline loss a share of 18,9c recorded in the six months ended September 30, 2009.

The group now had confirmed projects representing about 85% of the year’s anticipated total revenue, compared with only 41% in the first six months of last year.

Racec was confident that the infrastructure market was recovering, saying that many projects that had been postponed during the economic slowdown were now being revisited. The electrification division had also secured a number of new contracts for delivery in the next two years, which would positively contribute to the group’s earnings.

Further, a restructuring of the Greenbro business was also under way. This included changes to the senior management team, the employment of an interim MD while the incumbent MD is on sick leave and the completion of cost-cutting and retrenchment programmes.