Construction company Group Five expects its headline earnings per share (HEPS) for the six months ended December 31 to be between 40% and 50% lower than the comparative period the year before, owing to a disappointing performance from its engineering and construction cluster.

The company expected to report HEPS of between 102c and 122c for the six months under review, compared with 204c in the six months ended December 2013.

In a statement on Monday, the company attributed the engineering and construction cluster’s poor performance to a lower rate of trade in a number of segments, owing to a subdued order intake during the period; contract losses within civil engineering, specifically on one contract experiencing operational difficulties; and restructuring costs incurred by the civil engineering segment. 

Group Five further expected its fully diluted earnings a share to be between 108c and 127c – between 35% and 45% lower than the 200c reported in the prior comparative period.

The company’s manufacturing cluster, meanwhile, delivered a steady performance in flat markets, while the investments and concessions cluster delivered an improved result on the back of a good performance from the European operations and fair value upward adjustments from the group’s investment in service concessions. 

NEW CONTRACT
Group Five has, meanwhile, been awarded a R4.6-billion ($400-million) engineering, procurement and construction contract for the 350 MW gas- and oil-fired combined-cycle Kpone independent power project (IPP), in Ghana, by project owner Cenpower Generation Company.

“As a result of this award, the group’s engineering and construction order book improved materially from that reported on November 17,” the company noted.

The project developers last week broke ground on the $900-million Kpone project.

Located in the Tema Industrial Zone, near Accra, the IPP was expected to provide an additional 10% of Ghana’s generation capacity, almost 20% of its available thermal generation and supply power to an estimated one- million households, when commissioned in 2017.