Africa-Press – South-Africa. Stefanutti Stocks expects its earnings to jump by as much as 735%, which comes after it won a major legal victory in Zambia.
Stefanutti Stocks is a construction group that delivers infrastructure development projects to sectors across the built environment in South Africa and neighbouring regions.
It is based in South Africa and has established cross-border operations in Malawi, Mauritius, Zimbabwe, Botswana, Eswatini, Mozambique, and Zambia.
The company specialises in various construction activities, including building, civils, renewable, geotechnical, roads, and earthworks.
It also has strong expertise in electrical and instrumentation, mechanical, data-centre construction, oil and gas, and mining services.
However, between 2020 and 2024, the company experienced significant challenges, partly due to a 2008 Eskom tender to work on the Kusile power plant.
This took its toll on Stefanutti Stocks’ finances, clearly seen in its solvency, as the company is under significant debt pressure.
For the first time in 2022, the company’s total liabilities exceeded its total assets, deeming the group technically insolvent.
A technically insolvent company cannot settle all its liabilities if all its assets are liquidated. This means drastic measures are needed to improve the balance sheet.
Its latest annual report showed that it remained technically insolvent, with its liabilities exceeding its assets by R52 million.
However, the company’s fortunes seem to have turned, as a recent trading statement showed that Stefanutti expects a significant jump in its earnings for the year ended 28 February 2025.
In a trading statement released on Tuesday, 20 May 2025, Stefanutti explained that it had won a significant legal victory.
The arbitration centred around the Kalabo-Sikongo-Angola border gate road in the Western Province of Zambia (Kalabo settlement).
Recently, the Zambian Court of Appeal ruled in favour of Stefanutti Stocks and its joint venture in this case. Following the ruling, the parties have agreed to a settlement amount.
However, Stefanutti said the repayment terms still need to be concluded. The group recognised R148 million of its 50% share of the settlement amount, less costs.
“Given the uncertainty surrounding the recoverability thereof, an expected credit loss of R109 million and a tax charge of R12 million have been recognised,” the company said.
Stefanutti expects its earnings per share from total operations to reflect a profit of between 77.43 cents and 79.33 cents per share. This represents an improvement of between 715% and 735%.
Similarly, headline earnings per share are expected to reflect a profit of between 103.10 cents and 114.25 cents per share, an improvement of between 285% and 305%.
It should be noted that Stefanutti is working off a very low base, having reported earnings per share for total operations of 9.50 cents and a headline loss per share of 55.73 cents in 2024.
The market has reacted well to this earnings update, with Stefanutti’s share price up over 15% on Tuesday, 20 May, at around 11:45.
Stefanutti’s full results for its 2025 financial year are expected to be published on 27 May 2025.
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