Annual Results - Stefanutti Stocks
Transcript of Annual Results - Stefanutti Stocks
1
AnnualResults
12 months ended
28 February 2021
MSC Durban CruiseTerminal,
KwaZulu-Natal
Restructuring
Plan update
Hirt & Carter warehouse, KwaZulu-Natal
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2
Restructuring plan update (to end April 2021)
3
Sale of non-core assets
▪ One development property in the process of being sold
▪ Two properties (owner-occupied – formwork yard, satellite office)
▪ Residential property (Sasolburg)
▪ 33 Units at Northern Views (Centurion)
Restructuring plan update
4
Sale of certain operations
(classified as non-current assets Held for Sale)
▪ Mining Services division
• Materials Handling sub-division
• Tailings Management sub-division
▪ United Arab Emirates operation
• Sale negotiations ongoing
3
Restructuring plan update (to end April 2021)
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Sale of 93 units of underutilised plant & equipment
Net book value
R27.8mOutstanding settlement
R0.6mActual sale value
R45.9m
Winding down of contract mining sub-division
Sale of 77units
Net book value
R87mOutstanding settlement
R27.2mActual sale value
R115m
Restructuring plan update (to end April 2021)
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Recovery of slow-paying receivables
▪ Zambia
▪ Collected R36m (55% of R66m)
▪ Receipts remain irregular
55%R66m
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Retrenchments (May 2020 – Feb 2021)
Internal restructuring – Salaried headcount
Resignations (until end Feb)
15% R44.6m
258 Retrenchment costReduction Monthly savings
R4.5m
11% 93
187 ReplacementsReduction Monthly savings
R5.7m
Restructuring plan update
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26%
Reduction in
salaried headcount
Monthly savings
R10.2m
Eskom – Kusile Building Project (SSBR Package-16)
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5
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Eskom – Kusile Power Station (SS-Izazi Package-28)
Eskom – Kusile Building Project (SSBR Package-16)
10
6
Eskom – Kusile Main Civil Works (KCW Package-10)
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Key
indicators(continuing operations)
1212
Mpophoweni Wastewater
Treatment Works,KwaZulu-Natal
B-BBEE
Level 181.3% Black Economic
Interest score
Capex
R34m
LTIFR
RCR
Health and safety
0,35
0,03
Cash on hand
R756m
Debt : Equity
441%
Current order book
R5.5 bn
Operating loss
(R111m)Contract revenue
R5.0 bn
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COVID-19pandemic
Newlands Cricket Stadium,
Western Cape
Financial impact of COVID-19 (total operations)
Rm Revenue Operating profit
Secured contracts deferred due to lock-down (R696m) (R32m)
Secured contracts cancelled (R117m) (R5m)
Expected project awards delayed (unsecured) (R1 790m) (R70m)
Expected project awards cancelled (unsecured) (R293m) (R12m)
Unavoidable costs during lock-down - (R54m)
Total (R2 896m) (R173m)
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Year-on-year comparison of hours worked
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2.057
1.817
2.0451.987
2.0572.143
2.0152.108
2.013
1.269
1.528
1.732
1.615
0.676
0.996
1.368
1.499
1.358 1.347 1.323 1.290
0.846
0.960
1.099
0.0
0.5
1.0
1.5
2.0
Mar 2020
Level 5lock-down
April 2020
Level 5lock-down
May 2020
Level 4lock-down
June 2020
Level 3lock-down
July 2020
Level 3lock-down
Aug 2020
Level 2lock-down
Sep 2020
Level 1lock-down
Oct 2020
Level 1lock-down
Nov 2020
Level 1lock-down
Dec 2020
Level 1lock-down
Jan 2021
Level 3 *lock-down
Feb 2021
Level 3lock-down
FY2020 FY2021
Million
(37%) (37%)
(63%)
(51%)(31%)
(27%)(33%) (36%)
(33%)
(37%)
(37%)
(21%)
* Level 3 lock-down implemented on 29 December 2020
27 26 0
18 18 0
61 60 1
0 1
19
57
75 7987 89
109
224
243
0
50
100
150
200
250
April2020
May2020
June2020
July2020
Aug2020
Sep2020
Oct2020
Nov2020
Dec2020
Jan2021
Feb2021
COVID-19 Statistics: as at 28 February 2021
16
243 20 252 1 156
Total positive cases identified
Contractor positive cases
Total recoveriesTotal deaths
(sub-contractor)New cases
since Oct 2020
NigeriaSunday
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Feb 2021
ZambiaMozambique
14 13 0
Botswana
Limpo
po0 0 0
KwaZulu-NatalEastern Cape
Western Cape
Limpopo
Free StateEswatini
Northern Cape
North West
Mpumalanga
Gauteng
0 0 0
0 0 0
77 73 0
6
6 4 0
18 16 022 22 0
14 14 0
1 1 0
0 0 0
96% recovery rate
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Operational
overview
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Houghton Hotel, Gauteng
Construction & Mining (C&M)
Contract revenue
Rbn
Rm
Operating profit / (loss)
Continuing operations
Contract revenue
Rbn
Rm
Operating profit / (loss)
Total operations
4.05.1
0
2
4
6
Feb 2021 Feb 2020
80
(418)
-600
-400
-200
0
200
Feb 2021 Feb 2020
3.74.7
0
2
4
6
Feb 2021 Feb 2020
71
(383)
-600
-400
-200
0
200
Feb 2021 Feb 2020
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10
Construction & Mining (C&M) (continuing operations)
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41%
22%
15%11%
6% 5%
49%
12%
26%
5% 4% 4%
0%
10%
20%
30%
40%
50%
60%
Transportinfrastructure
Surface miningrelated services
Water, sanitation& pipelines
Bulk earthworks& geotechnical
Industrial plants,oil & gas
Energygeneration
Feb 2021 Order book
% turnover and order book by sector
Current Order Book
R3.5 bn
Feb 2021 Order book
Total work outside South Africa 39% 60%
Public sector work in SA 21% 21%
Public sector work outside SA 25% 38%
▪ Short-term potential awards ±R4.9 billion
▪ Identified prospects ±R30.6 billion
Building overview – Excluding the UAE
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Contract revenue
1.62.6
0
1
2
3
Feb 2021 Feb 2020
(22)(490)
-500
-300
-100
100
Feb 2021 Feb 2020
Rbn
Rm
Operating (loss)
Continuing operations
Contract revenue
1.11.7
0
1
2
3
Feb 2021 Feb 2020
(31)(514)
-500
-300
-100
100
Feb 2021 Feb 2020
Rbn
Rm
Operating (loss)
Total operations
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Building (continuing operations)
21
32%
23%
18%
12% 11%
2% 2%
27%
13%
8%4%
30%
10%8%
0%
10%
20%
30%
40%
Factories &warehouses
Shopping &retail
Office &commercial
Tourism &leisure
Housing &residential
Hospitals &medical centres
Energygeneration
Feb 2021 Order book
Feb 2021 Order book
Total work outside South Africa 7% 0%
Public sector work in SA 8% 47%
Public sector work outside SA 4% 0%
% turnover and order book by sector
▪ Short-term potential awards ±R2 billion
▪ Identified prospects ±R31.4 billion
Current Order Book
R1.9 bn
Mechanical & Electrical (M&E) overview
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Contract revenue
270 897
0
300
600
900
Feb 2021 Feb 2020
(64)(25)
-100
-50
0
50
Feb 2021 Feb 2020
Rm
Rm
Operating (loss)
Continuing operations
Contract revenue
Operating (loss)
Total operations
270 897
0
300
600
900
Feb 2021 Feb 2020
(64)(25)
-100
-50
0
50
Feb 2021 Feb 2020
12
Mechanical & Electrical (M&E) (continuing operations)
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% turnover and order book by sector
67%
33%
100%
0%0%
20%
40%
60%
80%
100%
120%
Industrial plants and oil & gas Surface mining related services
Feb 2021 Order book
▪ Short-term potential awards ±R890 million
▪ Identified prospects ±R8.6 billion
Current Order Book
R130m
Feb 2021 Order book
Total work outside South Africa 0% 0%
Public sector work in SA 11% 22%
Public sector work outside SA 0% 0%
Group (continuing operations)
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% turnover and order book by sector
29%
22%19%
11%8% 8%
3%
31%
35%
7%
16%
5%3% 3%
0%
10%
20%
30%
40%
Transportinfrastructure
Building Surface miningrelated services
Water &sanitation
Industrial plants,oil & gas
Bulk earthworks& geotechnical
Energygeneration
Feb 2021 Order book
Feb 2021 Order book
Total work outside South Africa 30% 38%
Public sector work in SA 17% 30%
Public sector work outside SA 19% 24%
▪ Short-term potential awards ±R7.8 billion
▪ Identified prospects ±R70.6 billion
Current Order Book
R5.5 bn
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R’000s
Head Office
Total
operationsas reported
Contract revenue continuing ops 4 679 460 1 650 385 897 191 - 7 227 036
Contract revenue discontinued ops 448 459 910 431 - - 1 358 890
Operating profit/(loss) continuing ops (382 500)** (514 313)^ (25 062) (100 394)# (1 022 268)
Operating (loss)/profit discontinued ops (35 080) 24 435 - - (10 645)
Operating margin % continuing ops (8.2%) (31.2%) (2.8%) - (14.1%)
Operating margin % discontinued ops (7.8%) 2.7% - - (0.8%)
Operating Segments: Year end FY2020
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As at 29 Feb 2020
* Excluded from reported contract revenue and operating profit as UAE is equity accounted to end June 2020. From July 2020 the operation has been classified as Held for Sale.
** Includes provision for slow-paying receivables of R331m.^ Includes provision for Kusile power project of R462m.
# Includes amortisation & impairment of intangible assets & goodwill of R55m.
C&MBuilding
(excl. UAE)* M&E
R’000s
Head Office
Total
operationsas reported
Contract revenue continuing ops 3 664 938 1 105 862 269 786 - 5 040 586
Contract revenue discontinued ops 380 920 485 850 - - 866 770
Operating profit/(loss) continuing ops 70 705 (30 533) (64 168) (87 423)^ (111 419)
Operating (loss)/profit discontinued ops 8 839 8 391 - - 17 230
Operating margin % continuing ops 1.9% (2.8%) (23.8%) - (2.2%)
Operating margin % discontinued ops (2.3%) 1.7% - - 2.0%
Operating Segments: Year end FY2021
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As at 28 Feb 2021
* Excluded from reported contract revenue and operating profit as UAE is equity accounted to end June 2020. From July 2020 the operation has been classified as Held for Sale.
^ Includes restructuring and legal fees of R78m.
C&MBuilding
(excl. UAE)* M&E
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Financial
overview
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Foundation for Ammonia Tank,
Sasolburg, Free State
Financial indicators – continuing operations
Contract revenue R5.0bn
Operating loss (R111m)
Loss after tax attributable to equity holders (R287m)
Loss per share (186.16c)
Headline loss per share (188.39c)
Headline loss per share - total operations (155.13c)
Cash on hand R756m
Results for the 12 months ended 28 February 2021
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Statement of Profit or Loss
R'000Reviewed
28 Feb 2021Restated
29 Feb 2020
Continuing operations
Contract Revenue 5 040 586 7 227 036
EBITDA 33 983 (767 820)
EBITDA % 0.7% (10.6%)
Depreciation & amortisation and impairment of goodwill (145 402) (254 448)
Operating Loss (111 419) (1 022 268)
Operating margin % (2.2%) (14.1%)
Equity accounted investees (1 323) (2 171)
Net finance costs (105 502) (87 126)
Loss before tax (218 244) (1 111 565)
Taxation (93 104) 4 412
Loss for the period (311 348) (1 107 153)
Discontinued operations 21 166 35 105
Loss for the year total operations (290 182) (1 072 048)
Loss attributable to ordinary shareholders (287 027) (1 070 943)
Headline loss attributable to ordinary shareholders (259 450) (1 041 065)
Weighted average shares in issue 167 243 684 167 243 684
Diluted weighted average shares in issue 188 080 746 188 080 746
EPS - Continuing operations (cents) (186.16) (662.00)
- Total operations (cents) (171.62) (640.35)
HEPS - Continuing operations (cents) (188.39) (644.10)
- Total operations (cents) (155.13) (622.48)
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Extracts from Statement of Profit or Loss
▪ Reduction in contract revenue
▪ EBITDA profit of R34m impacted by the negative effects the Covid-19 pandemic has had on the operations
▪ The comparative year’s EBITDA loss was impacted by:
• The raising of an additional provision of R462m for the Kusile power project
• Provision for slow paying receivables of R331m
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R'000Reviewed
28 Feb 2021Restated
29 Feb 2020
Continuing operations
Contract Revenue 5 040 586 7 227 036
EBITDA 33 983 (767 820)
EBITDA % 0.7% (10.6%)
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Extracts from Statement of Profit or Loss
▪ Depreciation of R130m (Feb 2020: R200m)
• Includes IFRS 16 depreciation charge of R29m (Feb 2020: R60m)
▪ Amortisation & impairment of assets & goodwill of R15m (Feb 2020: R55m)
▪ Resulting in an operating loss of R111m (Feb 2020: R1bn)
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R'000Reviewed
28 Feb 2021Restated
29 Feb 2020
Continuing operations
Contract Revenue 5 040 586 7 227 036
EBITDA 33 983 (767 820)
EBITDA % 0.7% (10.6%)
Depreciation & amortisation and impairment of goodwill (145 402) (254 448)
Operating Loss (111 419) (1 022 268)
Operating margin % (2.2%) (14.1%)
Extracts from Statement of Profit or Loss
▪ Reduced contribution from UAE operation of R6m to June 2020 (Feb 2020: R48m)
From July 2020 UAE has been classified as Held for Sale
▪ Net finance costs:
• Interest earned R29m (Feb 2020: R28m)
• Interest paid R134m (Feb 2020: R115m)
– increased due to funding requirements
– including discontinued operations total interest paid is R137m (Feb 2020: R126m)
▪ The tax charge has been impacted by the profitability of the cross-border operations as well as the
group not providing deferred tax on the losses incurred in the South African operations during the year
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R'000Reviewed
28 Feb 2021Restated
29 Feb 2020
Operating Loss (111 419) (1 022 268)
Operating margin % (2.2%) (14.1%)
Equity accounted investees (1 323) (2 171)
Net finance costs (105 502) (87 126)
Loss before tax (218 244) (1 111 565)
Taxation (93 104) 4 412
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Extracts from Statement of Profit or Loss
▪ Loss for the year from continuing operations is R311m
▪ Discontinued operations reporting a profit of R21m
▪ Loss for the year for total operations amounted to R290m
▪ HEPS continuing operations – loss of 188.39 cents per share
▪ HEPS total operations – loss of 155.13 cents per share
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R'000Reviewed
28 Feb 2021Restated
29 Feb 2020
Loss for the year (311 348) (1 107 153)
Discontinued operations 21 166 35 105
Loss for the year total operations (290 182) (1 072 048)
Loss attributable to ordinary shareholders (287 027) (1 070 943)
Headline loss attributable to ordinary shareholders (259 450) (1 041 065)
Weighted average shares in issue 167 243 684 167 243 684
Diluted weighted average shares in issue 188 080 746 188 080 746
EPS - Continuing operations (cents) (186.16) (662.00)
- Total operations (cents) (171.62) (640.35)
HEPS - Continuing operations (cents) (188.39) (644.10)
- Total operations (cents) (155.13) (622.48)
Statement of Financial Position
R'000Reviewed
28 Feb 2021Restated
29 Feb 2020ASSETSNon-current assetsProperty, plant and equipment 608 411 1 591 318Goodwill and intangible assets 345 664 405 930Equity-accounted investees 25 703 342 361Deferred tax assets 231 872 266 776
Current assetsBank balances 755 638 740 513Other current assets 2 285 196 3 186 154Non-current assets Held for Sale and disposal groups 1 053 068 -
TOTAL ASSETS 5 305 552 6 533 052
EQUITY AND LIABILITIESCapital and reservesOrdinary shareholders’ interest 352 568 729 904Non-controlling interest - (18 238)
Non-current liabilitiesInterest-bearing liabilities 182 821 479 601Non-interest-bearing liabilities - 26Excess billings over work done 46 506 294 823Provisions 40 376 121 948
Current liabilitiesOther current liabilities 2 651 350 2 985 721Excess billings over work done 1 205 771 1 053 733Provisions 551 512 885 103Taxation (10 079) 431Liabilities directly associated with discontinued operations 284 727 -
TOTAL EQUITY AND LIABILITIES 5 305 552 6 533 052Current interest-bearing liabilities 1 352 478 998 135
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Extracts from Statement of Financial Position
▪ Work in progress has reduced slightly to R611m▪ 37% reduction in trade accounts receivable
• Debtors days (excluding retentions) decreased to 95 days from 99 days
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Other current assets
Inventories 59 594 192 049
Contracts in progress 610 758 639 545
Trade accounts receivable 1 106 091 1 756 495
Other receivables 508 753 598 065
2 285 196 3 186 154
R'000Reviewed
28 Feb 2021Restated
29 Feb 2020ASSETSNon-current assetsProperty, plant and equipment 608 411 1 591 318Goodwill and intangible assets 345 664 405 930Equity-accounted investees 25 703 342 361Deferred tax assets 231 872 266 776
Current assetsOther current assets 2 285 196 3 186 154Non-current assets Held for Sale and disposal groups 1 053 068 -
▪ Reduction in Plant, Property and Equipment is attributable to:• Reversal of the prior year’s IFRS-16 right-of-use assets – R300m• Reclassification to non-current assets Held for Sale – R573m• Plant and equipment sold – R119m
▪ Capex spend of R34m (Feb 2020: R99m)• Excludes IFRS 16 right-of-use assets of R55m (Feb 2020: R305m)• Maintaining R30m (excluding IFRS 16 right-of-use assets)
Extracts from Statement of Financial Position
▪ Net cash on hand is R756m
▪ The group on 1 July 2020 entered into a term loan agreement with its Lenders on standard terms and conditions applicable to this type of funding terminating 28 February 2022.
▪ On 25 May 2021 agreement was reached with the lenders to extend the current capital repayment profile of the loan.
▪ The capital portion of the loan repayments to commence in July 2021 with the residual loan balance at 28 Feb 2022 of ±R420m. The resolution of the Kusile power projects’ claims taking longer than anticipated.
▪ The purpose of the Restructuring Plan is to put in place an optimal capital structure and access to liquidity to position the Group for long term growth in this uncertain environment.
▪ Lenders have agreed to provide continued guarantee support for current and future projects being undertaken by the group.
▪ Implementation of the Restructuring Plan to be concluded by February 2022.
▪ To the extent required, shareholder approval will be sought.
▪ Cost of funding: 5.4% above prime including arranging and facility fees.
▪ The funding provided by the Lenders has assisted in relieving the group’s liquidity pressures even though current liabilities exceed current assets at 28 February 2021.
▪ In addition thereto, uncertainties surrounding the COVID-19 pandemic and contingent liabilities as noted in note 25 of the group’s Consolidated Annual Financial Statements for the year ended 29 February 2020, continue to indicate that a material uncertainty exists that may cast doubt on the group’s ability to continue as a going concern in the short term.
▪ However, having converted the short-term funding agreement with the Lenders to a term loan and on the basis of successfully implementing the Restructuring Plan, the directors consider it appropriate that the group’s results for the year be prepared on the going-concern basis.
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R'000Reviewed
28 Feb 2021Restated
29 Feb 2020ASSETSCurrent assetsBank balances 755 638 740 513Other current assets 2 285 196 3 186 154Non-current assets Held for Sale and disposal groups 1 053 068 -
TOTAL ASSETS 5 305 552 6 533 052
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Extracts from Statement of Financial Position
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▪ Total interest bearing debt R1 553m (Feb 2020: R1 510m)
▪ Including amounts due to: - Term loan funding (R1 321m) - (Feb 2020: R839m)
- IFRS 16 rental liability (R55m) - (Feb 2020: R300m)
- VRP Settlement Agreement (R111m) - (Feb 2020: R103m)
▪ Interest bearing debt : equity ratio deteriorated to 441% (Feb 2020: 207%)
▪ Other current liabilities includes short term interest bearing liabilities of R1 352m (Feb 2020: R998m)
R'000Reviewed
28 Feb 2021Restated
29 Feb 2020
Non-current liabilitiesInterest-bearing liabilities 182 821 479 601Non-interest-bearing liabilities - 26
Current liabilitiesInterest-bearing liabilities 1 352 478 998 135Non-interest-bearing liabilities - 22 520Bank overdraft 18 134 32 376
Interest-bearing liabilities directly associated with discontinued operations 284 727 -
Extracts from Statement of Financial Position
▪ Trade payables, accruals and other current liabilities have reduced from R2bn to R1.3bn
▪ Decrease in advances received from customers of R96m
▪ Contracting provisions decreased by R415m from Feb 2020
▪ Liabilities associated with discontinued operations amount to R285m
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R'000Reviewed
28 Feb 2021Restated
29 Feb 2020Non-current liabilitiesExcess billings over work done 46 506 294 823Provisions 40 376 121 948
Current liabilitiesOther current liabilities 2 651 350 2 985 721
Trade accounts payable, accruals & other current liabilities 1 297 983 1 965 066Excess billings over work done 1 205 771 1 053 733
Provisions 551 512 885 103
Liabilities directly associated with discontinued operations 284 727 -
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Abridged statement of cash flows (total operations)
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Working capital changes
Cash consumed from operations
Net interest paid and dividend income
Taxation paid
Financing activities
Opening cash balance
Closing balance
Investing activities maintaining
Exchange rate effects and other
No dividend has been declared
Other investing activities
Investing activities expanding
756
-92
-16
270
279
-4
-30
-70
-80
32
-274
741
741
0
26
601
149
-32
-67
-60
-6
-437
-314
881
Cash at the end of the year - discontinued operations
28 Feb 2021(Reviewed - Rm)
29 Feb 2020(Restated - Rm)
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Industry-
related
matters
Nooitgedacht water treatment plant,
Port Elizabeth
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40
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Industry-related matters
▪ Legal process relating to the civil claim from the City of Cape Town
• The arbitration is set for 13 September to 8 October 2021
• The group remains confident that it can defend the matter
▪ Voluntary Rebuild Programme (VRP)
▪ The group continues to be negatively affected through disruptive and
unlawful activities by certain communities and informal business forums
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Board related
matters
Newlands Cricket Stadium,
Western Cape
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Changes to the board of directors
▪ Dermot Quinn, non-executive director, will resign at the company’s next Annual General Meeting in August 2021
▪ John Poluta, alternate non-executive director, to be appointed as a
non-executive director at the company’s next Annual General Meeting
▪ Antonio Cocciante will step down as CFO and executive director effective 31 May 2021
▪ Yolanda du Plessis will be appointed as acting CFO and executive director effective 1 June 2021
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Chairperson
Yolanda
du Plessis
Antonio
Cocciante
Zanele
Matlala
Howard
Craig
Bharti
Harie
John
Poluta
Dermot
Quinn
Busisiwe
Silwanyana
Russell
Crawford
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Conclusion
Ferrobank Tailings Facility,
Emalahleni, Mpumalanga
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Conclusion
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Kusile Power Projects
Successful close-out of all arbitration cases
Successful implementation of the Restructuring Plan
Execution of projects at tender margin
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Questions
& Answers
Palapye water treatment expansion,
Botswana
www.stefanuttistocks.com
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Disclaimer
This presentation may contain forward-looking statements, which include all statements other than statements of
historical facts, which have not been reviewed or reported on by the group’s auditors, and may reflect the current
views or expectations of the group with respect to, among other things, future events, strategy, the economic outlook
for the industry, the group’s liquidity, capital resources, expenses and financial and operational performance.
Words, including but not limited to, "aim", “believe”, “anticipate”, “expect”, “intend”, "could", "would", “should”,
“estimates”, “project”, “plan”, “may”, “potential”, "targets" or similar words and phrases or the negative thereof are
used to identify such statements. Forward-looking statements, by their very nature, contain known and unknown
risks, uncertainties, assumptions and other important factors, because they relate to events and depend on
circumstances that may occur in the future, whether or not outside the control of the company.
Such factors may cause the company's actual results, performance or achievements to be materially different from
future results, performance, developments or achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous assumptions regarding the company's present
and future business strategies and the environment in which it will operate in the future.
No assurance can be given that forward-looking statements will prove to be correct. These forward-looking
statements speak only as at the date of this presentation. In addition, no obligation is undertaken by the group to
update or revise any forward-looking statements contained within this presentation to reflect any change in its
expectations with regard thereto or any change in events, conditions or circumstances on which any of such
statements are based, and investors are cautioned not to place any reliance thereon.
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