Picture: ISTOCK
Picture: ISTOCK

JSE-listed civil and construction group Esor is likely to avoid further retrenchments during the first half of 2018, having already lost 20% of its workforce in the six months to August, says CEO Wessel van Zyl.

Growth continues to be held back by delays in various projects, but the group has an order book worth R1.41bn, up from R1.4bn a year before.

"The slightly improved order book is not reflective of the buoyant tender market," Van Zyl said on Thursday when the group released financial results for the six months to August.

The nonawarding of tenders to contractors was frustrating, largely due to funding constraints in government infrastructure budget allocations.

"We are sitting with an order book worth R1.41bn, which will ensure we perform okay for the next year and should not have to retrench anyone else."

Esor had R3bn worth of work in pending awards. "The problem is many of the projects within this book, including some where the state needs to spend, have stalled," he said.

Esor retrenched 438 people in the reporting period. It had 2,056 remaining employees on August 31.

Revenue decreased 17% to R553m from R666m in the comparative period. Profitability was affected by challenging market conditions and continued remedial work on the Northern and Western Aqueduct projects in Durban, resulting in a small profit for the first half.

Profit before tax was down 74% to R3.1m from R11.9m. Earnings per share declined to 0.44c compared with 2.05c with headline earnings per share decreasing to 0.41c from 2.15c.

Esor would continue to pursue water-related opportunities such as desalination projects, as well as turnkey projects with strategic partners.

Its share price has collapsed about 85% over the past five years. It has a market capitalisation of about R103.7m.

"The group remains stable in a challenging operating environment," said Van Zyl.

Esor has not paid a dividend since 2013, when it distributed 38c per share from the sale of Esorfranki Geotechnical to UK construction group Keller.

andersona@businesslive.co.za

Please sign in or register to comment.