Bricks and coal group Brikor, which survived liquidation five years ago and has been battling over the past decade amid the slump in construction activity in particular, said on Monday cost-saving measures boosted its profits in the year to end-February.
Brikor increased its profit after tax to R12m for the financial year ended February 28. That compares with the profit after tax of R1.5m for the prior financial year.
The use of mobile equipment rentals in its coal segment resulted in cost savings relating to diesel, repairs and maintenance, as well as labour costs. There was also a decrease in the provision for environmental rehabilitation liability in the last quarter of the financial year.
The rehabilitation provision relates to the estimated costs of correcting any disturbance relating to mining and other activities.
Brikor has also had a chequered history over the past 10 years, with its shares only getting readmitted to the JSE two years ago after a seven-year suspension for failing to publish financial statements within the stipulated time.
Brikor shares, which are not highly tradable, slipped 10% to close at 88c on the JSE on Monday, giving the company a market value of R741m.
Revenue decreased to R257.9m from R292.7m year on year, as the initial hard lockdown curbed activity in the bricks segment while its coal mining operation, Ilangabi, was only allowed to operate at 50% capacity. High levels of rainfall in January and February in 2021 also affected sales volumes.
Brikor and other construction companies have borne the brunt of the slump in construction activity as the economy faltered, forcing several players into business rescue. Placing a company in business rescue is a legal process designed to save the company.
Over the past week, Stefanutti’s year-end results showed that the construction and engineering group was technically insolvent after its total liabilities exceeded its assets by R1.3bn.
The future of Stefanutti Stocks, one of the few construction stocks still listed on the JSE, now depends on its restructuring plan that is due to end early in 2022 and includes the fire sale of its noncore assets and retrenchments.
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