31 May 2019

Construction engineering company Stefanutti Stocks on Thursday said
it was experiencing 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.

Contract revenue also decreased to R9.9-billion, from R10.4-billion in
the prior year.

Stefanutti Stocks’ current order
book is valued at R11.5-billion at the end of the period.

The company 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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