JSE-listed Group Five expects to report full-year losses as its Engineering & Construction (E&C) cluster continues to disappoint.
The construction group anticipates a 590c loss and headline loss a share for the year ended June 30, compared with the reported earnings a share of 375c and headline earnings a share of 335c for the prior year.
The E&C operations had traded considerably below the margin guidance provided by the company in February, Group Five explained in a trading update on Monday.
Further impacting profitability and a recovery of overheads was the continuing worsening of markets, with the E&C cluster unable to entirely replace work traded, as well as a contract lossmaking ratio, which remained worse than the target.
Further, the group expected the recognition, in the first half of 2017, of the R255-million socioeconomic contribution, as well as the commercial close out and final settlement of a previously-disclosed long outstanding South African public national multiproduct pipeline contracts, which reduced operating profit by R244-million, to influence the full-year financial results.
