Stefanutti lifts first-half earnings 46% despite sober economic activity in SA
Stefanutti partly benefited from geographic diversification, with the UAE operation contributing R38m in earnings from R16m a year before
Construction group Stefanutti Stocks fared better in the six months to end-August, and even its revenue held broadly steady, despite what the company said was a tough operating environment.
Headline earnings per share (HEPS) rose 46% to 60.30c, far outstripping revenue that slipped 1% to R5.1bn, the company said in a statement on Thursday.
The company partly benefited from geographic diversification, with the United Arab Emirates operation contributing R38m in earnings from R16m a year before.
Stefanutti’s footprint stretches across Sub-Saharan Africa, specialising in building hospitals, hotels, factories, offices, shopping centres, airport facilities and housing.
Its order book shrunk to R12.8bn, from R14.3bn a year ago, reflecting subdued economic activity in SA. Only R3.8bn of the total R12.8bn is generated outside the home market.
Operating profit from the construction and mining division rose to R111m, from R92m, as contract revenue rose to R2.8bn from R2.4bn. But the building division proved to be a drag, with operating profit slipping to just R6m from R22m. This excludes profit from the UAE operation.
Operating profit from the mechanical and electrical segment rose to R8m from R1m, as revenue rose to R581m from R541m.
The company said a “continuing slowdown in construction activity coupled with an aggressive contracting environment will result in operating profit margins remaining under pressure in the short to medium term”.
The share price was up 2.01% to R3.05 in early trade on the JSE.