Construction company Stefanutti Stocks has posted an operating loss of R111-million for the financial year ended February 28, owing to adverse market conditions and reduced contract revenue as a result of Covid-19.
This compares to a restarted loss of R1.02-billion for the financial year ended February 29, 2020.
The company reported a loss a share for continuing operations of 186.16c, compared with a loss a share of 662c for the prior financial year.
The company’s order book for continuing operations stands at R5.5-billion, of which R2.1-billion comprises work outside of South Africa.
CEO Russell Crawford says the company remains focused on progressing the implementation of a restructuring plan, which aims to place an optimal capital structure in place and effect access to liquidity for long-term growth.
The plan involves the sale of noncore assets, underused plant and equipment, and of certain operations, combined with internal restructuring initiatives.
Linked to this is a short-term funding conversion agreement that Stefanutti reached with its lenders on a term loan which terminates on February 28, 2022. The company managed to extend the current capital repayment profile of the loan.
Meanwhile, Stefanutti’s Construction and Mining business unit declared an operating profit of R71-million in the year under review, against a restarted operating loss of R383-million posted in the prior financial year.
Crawford advises that the company will be winding down its contract mining subdivision, with only one small contract remaining active until October this year.
He adds that opportunities do still exist for this business unit in transport infrastructure, water and wastewater treatment, mine infrastructure and in the alternative energy sector.
The order book for Construction and Mining was R3.6-billion as at the end of February.
The company’s Building business unit had suspended operations for three months during the reporting year, owing to Covid-19 restrictions.
This resulted in the business unit posting an operating loss of R31-million, which was nonetheless better than the restarted operating loss of R514-million reported in the prior financial year.
Crawford says the Building business unit can benefit from government’s construction plans, together with commercial, retail and industrial development opportunities in the private sector, particularly in Gauteng, KwaZulu-Natal and the Western Cape.
He notes that the Mozambique portion of the unit’s order book remains under pressure, owing to the ongoing political unrest in the northern parts of the country where gasfield expansion projects are taking place.
The unit’s total order book at year-end stood at R2-billion.
Moreover, Stefanutti’s Mechanical and Electrical business unit reported an operating loss of R64-million in the year under review, compared with a profit of R25-million posted in the prior year.
Crawford explains that the unit was severely impacted by the effects of the Covid-19 pandemic, particularly concerning commodity prices, which resulted in major plant maintenance and upgrade projects being placed on hold.
However, he remains confident about opportunities present in the petrochemical sector for the company’s Oil and Gas division.
The total order book for Mechanical and Electrical work stood at R136-million at the end of the reporting year.