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Stefanutti's earnings sharply lower

Construction group Stefanutti on Tuesday (13 November) reported a 62% drop in diluted headline earnings per share for the six months ended August 2012 to 25.07 cents from the previous year's 65.30 cents.
"This is mainly because of loss-making contracts‚ the ongoing volatility surrounding the global and local economies‚ and the delayed private and public infrastructure investment projects.

"This has negatively affected activity levels in the South African construction sector for a number of years now and has led to aggressive competition among contractors‚ as can be seen by low margin projects throughout the industry‚" Stefanutti said.

The group's revenue jumped 28% to R4.9bn in the same period from R3.8bn reported previously.

Stefanutti's order book increased to R9.4bn‚ a slightly higher than the R9.3bn recorded in May this year.

The group says the South African construction industry may improve in the medium term but warns that it is expected to remain under pressure for the foreseeable future.

"There are a number of medium size projects coming to the market and this helps to maintain the order book.

"However‚ larger projects such as the government's infrastructure investment and renewable energy programmes‚ the proposed development of the large natural gas deposits in Mozambique and the clean fuels project in South Africa are required to stimulate the construction sector‚" Stefanutti said.


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