Esor’s update shows construction firms still under pressure

Tags

---

21-05-2014
Read : 208 times
BusinessDay
Source

ESOR, a specialist geotechnical services, roads, earthworks and pipeline construction group in finalising its results for the year to February expects a substantial basic loss per share.

This indicates that the South African construction industry is still extremely fragile, especially as government’s national infrastructure plan fails to kick in.

Esor, formerly Esorfranki, said on Tuesday that it expected a basic loss per share of between 39.6c and 47.4c and a headline loss per share of between 10.3c and 12.3c for the period. This compared with earnings per share of 23.5c and headline earnings per share of 20.5c in the previous financial year.

The group, which operates in South Africa, sub-Saharan Africa and the Indian Ocean islands, said the loss was "to a large extent" a result of three contracts reported on during its interim period worth a total of R166m.

But Esor said its work on hand and future pipeline remained healthy, with a secured two-year order book of more than R2.6bn and imminent awards of about R3bn.

The civils division is involved in a number of power infrastructure projects for Eskom at its new Kusile station, some of which had been delayed for various reasons, including industrial action.

To this end, Esor said the group’s liquidity would "remain tight" until all claims were resolved and due payments had been made.

The company said its financial results for the year were expected to be released during the week ending May 30.