Mazor swings into an interim loss exceeding its market value
The building supplies group saw a first-half loss of R24m to end-August as Covid-19 battered the construction sector
Buildings materials group Mazor has suffered a first-half loss exceeding its R19m market capitalisation, and is expecting further pain as SA’s construction sector reels in the wake of the Covid-19 pandemic.
Covid-19 brought construction to a halt during parts of the group’s half-year, while the company is unsure about new projects as there has been significant liquidations within the industry from professional engineers to developers and construction companies.
The group specialises in steel frames used in building, and aluminum frames such those as for windows. It also has a glass business.
Mazor reported a headline loss of R24m in the six months to end-August, from a loss of R4.8m, with group revenue almost halving to R113.3m.
“The interim period has been challenging for Mazor, the construction industry and the SA economy as a whole,” CEO Ronnie Mazor said.
The environment remains highly uncertain, the group said, even though the state has pledged to roll out infrastructure projects to help stimulate the economy.
In June 2020, the government announced an investment drive that would cover 55 projects, though this would take time to materialise, the group said.
“Covid-19 will continue to have an impact, including on particular industries such as hospitality and tourism, and we believe it is a long road to recovery,” the statement reads.
To mitigate the effects of the economic downturn on revenue, the group focused on reducing rental and employment costs, as well as increasing liquidity through sales of assets.
Sales that took place as part of the closure of the Gauteng branch of its glass division, such as equipment, generated cash flows of R6.4m, while the group received a further boost of R9.5m from the sale of land.
Mazor had cash of R28.9m at the end of August, from R32.9m previously, and said it has the resources to continue operating “for the foreseeable future”.
In afternoon trade on Friday, Mazor’s little-traded share was unchanged at 17c, having lost about three quarters of its value so far in 2020.
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