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Cape Town - Construction and engineering firm Group Five
[JSE:GRF] has hit a major slump, due to contracts lost in the Middle East, but
expects earnings to recover within a year, says a report.
The group's revenue remained flat at R8.8bn and headline
earnings per share for continuing operations for the year ended June 2012 fell
by 64.4% to R1.80 from the corresponding period in 2011.
Cash-strapped clients in the Middle East were failing to
settle debt owed to the company and impairments from previously discontinued
operations in India were the biggest reason for losses. Impairments of assets
in the construction materials business, which were being sold off also added to
losses, MoneyWeb reported.
CEO Mike Upton told the publication that although losses
from the Middle East were bigger than expected, the firm had no plans to exit
the region. The focus remained on cutting costs and settling payment disputes
for now, he said.
Looking forward Upton reportedly said a slight increase in
construction orders combined with cost cutting and reorganising of the
business, positioned the group for a return to profitability in 2013.
Group Five shares rose 71 cents‚ or 3.11%‚ to R23.56 on Tuesday morning on the JSE.
- Fin24
