Following four lossmaking periods, construction firm Esor on Thursday announced that it had returned to profitability.

The group moved from a loss of R24-million for the six months ended August 31 last year, to a profit of R6.1-million for the same period this year.

Revenue was down 2.2% from last year, to R772.6-million.

CEO Wessel van Zyl said in Johannesburg that restructuring at the group had largely been completed. Employment at the construction division now reached 2 242 people, down from 2 887 in the same period last year.

Van Zyl noted that Esor still faced a tough trading environment, while it was also battling to complete the troubled Umzumbe low-cost housing project, in KwaZulu-Natal.

The R66-million project should have been wrapped up in April this year, but would run on to March 2016, as Esor faced on-site logistics and efficiency challenges.

Van Zyl estimated that Esor would make a R10-million loss on the project.

The group’s R4-billion Diepsloot joint venture development (with Calgro M3) also faced “quite painful” bottlenecks in terms of government and environmental approvals.

Van Zyl was hopeful that the first sod on the project would be turned in March 2016.

He said Esor’s two-year order book had declined 23.1%, to R1.6-billion, at August 31.

“We are comfortable at R1.6-billion.”

Van Zyl was also pleased that operating margins at Esor’s construction division had improved from –3.7% in August last year, to 2.3% this year.

Around 72% of the current order book was made up of work for government and parastatals, down from 85% in August last year. Work on the Kusile power station made up between 25% and 28% of the order book.

“Government will always be our single biggest client,” noted Van Zyl.

Looking ahead, he said Esor’s next step was to grow, and specifically in its pipe services division, as well as outside South Africa into neighbouring countries.

The group was currently active in Zimbabwe, Botswana and Swaziland.

Van Zyl added that a group of individuals had acquired around 32% of Esor’s shares over recent months, with the aim of developing three residential projects in Gauteng. Their intention was not, however, to acquire more shares, as far as he was aware.