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Short-term liquidity pressures at Stefanutti Stocks

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The construction engineering company Stefanutti Stocks made mention on Thursday that it was facing short-term liquidity pressures and was considering raising funding through a combination of ring-fenced project financing, a number of alternative funding solutions and, as a last resort, a fresh issue of shares.

The company, which said the trading environment remains “extremely difficult,” incurred losses for the financial year ended February 28.

Although its loss a share for the year had narrowed to 65.9c, from a loss a share of 317.7c in the prior financial year, the company also reported a headline loss a share of 70.1c, compared with headline earnings a share of 67.5c in the prior financial year.

It further said the adverse market conditions were contributing to an increase in delayed payments from clients, while the group’s overall cash had decreased to R881-million, from R916-million in the prior year, resulting in the liquidity pressures.

Meanwhile, earnings before interest, taxes, depreciation and amortisation decreased to R55.5-million, compared with R345.5-million in the prior financial year.

The contract revenue was noted to have also decreased to R9.9-billion from R10.4-billion in the prior year.

The company’s current order book is valued at R11.5-billion at the end of the period.

Stefanutti Stocks expects the continuing contraction in construction activity to result in its turnover and operating profit margins remaining under pressure for “some time to come”.

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