Kpone Power Project: Group Five to Cut Jobs

South African engineering and construction firm Group Five will cut more jobs as it seeks to reduce the size of loss-making divisions, the company said on Tuesday.

The company posted a full-year loss of 1.3 billion rand ($90.76 million), 62 per cent higher than a year previously, due to higher costs from the delayed Kpone power project in Ghana.

South African construction companies have been hit hard in recent years as stagnant growth has hobbled public infrastructure spending, prompting companies to seek opportunities elsewhere.

Group Five cut jobs last year when it began the restructuring process of its troubled Engineer, Procure and Construct (EPC) division.

The group, which also has a manufacturing arm, will further cut back its EPC and Turnkey Project Solutions businesses, it said in a statement.

“Unfortunately, there will be some additional retrenchments and we have started the relevant consultation processes,” the statement said.

In May, the company secured 650 million rand ($46.12 million) in short-term bridge funding from local banks in efforts to offset losses from the Kpone project and a lacklustre construction market at home.

Group Five reported a diluted headline loss of 1,380 cents per share, compared with a loss of 853 cents per share for the year ended June 2017.

Headline EPS is the most widely watched profit measure in South Africa which strips out certain one-off items.

Source: Reuters