In­vest­ment con­fer­ence pledges to ben­e­fit con­struc­tion sec­tor, says Ste­fanutti Stocks |

R134bn promised at in­vest­ment sum­mit

Cape Times - - BUSINESS REPORT - ROY COKAYNE roy.cokayne@inl.co.za

STE­FANUTTI Stocks, the listed con­struc­tion group, be­lieves the R134 bil­lion in in­vest­ment pledges made at Pres­i­dent Cyril Ram­phosa’s in­vest­ment con­fer­ence should ben­e­fit the con­struc­tion in­dus­try.

Wil­lie Mey­burgh, the chief ex­ec­u­tive of Ste­fanutti Stocks, said yes­ter­day that the group was al­ready work­ing on a brown­fields project in East Lon­don to ex­pand Mercedes-Benz’s body shop.

Mey­burgh said Ste­fanutti’s con­tract was val­ued at R1.2bn and was sched­uled to be com­pleted by the mid­dle of next year.

Mercedes-Benz pledged to in­vest a to­tal of R10bn in its East Lon­don plant at the in­vest­ment con­fer­ence.

Mey­burgh said Ste­fanutti had also priced a dis­tri­bu­tion cen­tre for Ama­zon, which was ex­pected to be awarded early next year, with the project val­ued at be­tween R600 mil­lion and R700m.

He said they were also op­ti­mistic there would be some ben­e­fit to the var­i­ous di­vi­sions within Ste­fanutti from the gov­ern­ment’s stim­u­lus pack­age.

“The re­cent medium term bud­get pol­icy state­ment men­tioned a num­ber of R92.5bn. We are not sure where or when it is al­lo­cated.

“We would like to be­lieve that in the Bud­get speech there will be more of that. So its not all bad (news) and in the medium- to longer-terms we would like to be­lieve that these things are go­ing to ma­te­ri­alise,” he said.

Mey­burgh said Ste­fanutti also had sev­eral longer-term op­por­tu­ni­ties, in­clud­ing the clean fu­els pro­gramme, a planned liq­ue­fied nat­u­ral gas (LNG) project in Mozam­bique and the Le­sotho High­lands Wa­ter Project.

He said they un­der­stood from a mar­ket sur­vey that Sa­sol and oth­ers would start to in­vest in the clean fu­els pro­gramme from 2020 while a de­ci­sion on the LNG plant in Mozam­bique was an­tic­i­pated in June next year, although it was orig­i­nally ex­pected in June this year. Mey­burgh said some in­fra­struc­ture work on the an­cil­lary works of the Le­sotho High­lands Wa­ter Project was tak­ing place and peo­ple were be­ing re­lo­cated from the site “so there is some ac­tiv­ity”.

Mey­burgh said Ste­fanutti’s cur­rent or­der book de­clined to R12.8bn in the six months to Au­gust, which was a two-year low. How­ever, Mey­burgh said there were var­i­ous cross bor­der op­por­tu­ni­ties and fur­ther afield in road and bridge con­struc­tion, bulk pipe­lines, ma­rine and of­fice build­ings.

Mey­burgh said 30 per­cent of Ste­fanutti’s rev­enue was from out­side South Africa but it ac­counted for 50 per­cent of the group’s prof­its.

An in­creas­ing trend of clients de­lay­ing pay­ments was also putting pres­sure on the group’s work­ing cap­i­tal. De­spite the tough South African con­struc­tion en­vi­ron­ment, the group’s op­er­at­ing profit im­proved, he said.

Ste­fanutti yes­ter­day re­ported a 1 per­cent de­cline in rev­enue to R5.13bn in the six months to Au­gust from R5.19bn in the pre­vi­ous year. Op­er­at­ing profit im­proved by 14 per­cent to R124.8m from R109.8m. Head­line earn­ings a share grew by 46 per­cent to 60.30c from 41.41c. A div­i­dend was not de­clared.

Shares in Ste­fanutti rose 7.02 per­cent on the JSE yes­ter­day to close at R3.20.

| SIM­PHIWE MBOKAZI African News Agency (ANA)

THE STE­FANUTTI Stocks head of­fice in Kemp­ton Park.

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