Calgro expects sharp interim earning slump
CALGRO M3 Holdings, the listed affordable housing and private memorial parks developer, reports the six months to August was one of the most difficult ever experienced by the group.
The company said yesterday it expected its headline earning a share for this reporting period to be 93.48 percent lower than the previous corresponding period, which equated to headline earnings a share of 3.11 cents compared to 47.71c in the prior period.
Earnings a share was expected to decrease by 50.16 percent to 23.78c from 47.71c for the same period.
Calgro attributed the difficult operating environment to macro and micro economic uncertainty coupled with uncertainty about land expropriation; its Scottsdene and Fleurhof projects being shut down, because of “illegal occupation” with additional security and repair cost, which was slightly offset by a variation order received on Fleurhof; and major electrification challenges on Fleurhof, which resulted in standing time cost.
It also attributed it to the impact of the adoption of International Financial Reporting Standards 15, the drought in the Western Cape, and the cancellation of the executive share scheme and corresponding fast-tracked expense.
The company said these issues had a negative impact on Calgro’s operational cash flow, leading to the deliberate slowdown in levels of activity on other sites.
Despite these uncertainties and challenges, Calgro said its management had worked tirelessly to ensure the company had a healthy balance sheet, it had 10 projects in the ground at various phases to mitigate risk and had expanded its memorial parks business. Calgro is expected to release its interim financial results on Monday.
Shares in Calgro dropped 16.33 percent on the JSE yesterday to close at R7.53.