JOHANNESBURG: South Africa’sGroup Five <GRFJ.J> swung to its first six-month loss in 11 years due to a 255 million rand ($19 million)settlement with the country’s government and weakness in its engineering and construction unit, the company said on Wednesday. The construction company, which makes 67 percent of the its revenue from South Africa, reported a loss of 310 cents per share for the six months ended December 2016, compared to a profit of 131 cents in the previous year.
Seven construction companies agreed in October to contribute a total of 1.5 billion rand over the next 12 years towards a fund to develop skills in the sector and give black workers a bigger role, after antitrust authorities imposed a penalty on the sector in 2013 for collusion in tendering processes.
“Operating losses incurred by the Projects and Civil Engineering segments, the impact of continuing weak order book intake in the Engineering & Construction cluster as a whole and the resultant under-recovery of direct and indirect overheads have weighed heavily on these results,” group chief executive Eric Vemer said in a statement. Group Five, which makes 81.2 percent of its group revenue from the engineering and construction division, said revenue in that division decreased by 23.4 percent to 4.8 billion rand. The group cut its dividend by 67 percent to 14 cents per share from 42 cents.
