A weaker-than-expected performance by construction major Group Five’s engineering and construction division has been offset by an improved performance by its investments and concessions cluster, with underlying projects continuing to deliver strong operating results, the company said on Tuesday.
Noting that the South African construction and engineering market had experienced further delays in contract awards and low volumes of work flow in an industry already impacted by over-capacity, it added that this had placed pressure on the replenishment of the group’s contracting order book.
“In the first half of this financial year, the group incurred retrenchment and rationalisation costs. This follows additional interventions not originally planned but which have been necessitated due to further market weakness.
Conversely, increasing heavy and light vehicle traffic numbers were enhancing project cash flows in Group Five’s investments and concessions division, which drove investment performance. This had led to improved overall financial performance from the European operations.
Development profits and gains made on the value of Group Five’s Properties’ project portfolio had also driven up the business’ performance.
Group Five will release its interim results on February 15.
