Civil Engineering and construction group Sanyati Holdings on Monday announced fully diluted headline earnings (HEPS) from continuing operations at 7.60 cents for the year ending in February, from 15.42 cents previously.

It underlined fully diluted headline earnings per share from total operations at 7.60 cents, from 12.72 cents previously.

The group reported a fully diluted loss per share of 26.71 cents for continuing operations, from fully diluted earnings per share of 15.27 cents previously.

Revenue from continuing operations declined to R1.53 billion, from R1.99 billion previously, while group gross profit slipped to R177.56 million, from R264.9 million in 2010.

"The challenging trading conditions already evident in the domestic construction market last year continued to be experienced throughout this financial year.

"The characteristics of an oversupply of construction capacity and the slow turnaround in the adjudication and award of tenders continue to be dominant factors in our industry," Sanyati said.

The group said that its disappointing financial results were a direct consequence of this difficult trading environment, with headline earnings per share of 8.46 cents a share down 52%.

It said its earnings before interest, tax, depreciation and amortisation (ebitda) margins of 4.8% (8.6% in the prior year) was similarly a reflection of tight trading conditions and reduced volumes of activity.

"The trading result of our core civil construction business was a reduction in ebitda of 40% on the prior year.

"The Sanyati North division was the poorest performer as a result of its inability to secure sufficient contract opportunities following completion of two major projects early in the financial year and mobilisation delays on the Medupi contract.

"The Coastal business was severely impacted by the delay with the award of the Western Aqueduct project by Ethekwini municipality and the holding costs of key resources associated therewith.

"Sanyati Central produced a very credible result in difficult trading conditions," the company said.

The group said its specialist contracting businesses were severely affected by lack of activity in their chosen markets, resulting in an aggregate ebitda loss of R14 million for the reporting period.

The group's board decided to impair the carrying value of goodwill by the amount of R155 million.

The goodwill impaired related to the Sanyati Piling division (R30 million) and the Sanyati North division (R125 million) and resulted in a fully diluted loss per share.

Looking ahead, Sanyati said: "The group's response to these realities has been to continue to drive our efforts to reduce our dependence on traditional markets within SA.

"The objective of identifying attractive opportunities in select countries outside of SA is beginning to bear fruit.

"The other major objective of leveraging our position in niche markets offering strong growth prospects within SA has also received much attention during the year."

The group highlighted positive progress in Uganda and Zambia, a growing business in the laying of fibreoptic cable in SA and beyond its borders, its recent investment in the spiral welded steel pipe industry for the water distribution market, new mining clients requiring broad infrastructural services, and its onsite performance and consequent extension of awards in the rail market boded well for its future.

Sanyati said its order book at the end of February was R866 million, with imminent awards of R1.114 billion and close prospects of a further R1.74 billion in prospect.

The imminent awards and close prospects categories included cross-border projects with an aggregate value in excess of R1.6 billion.

"The value of the specialist contractor businesses order books for the new financial year are already equivalent to the entire turnover realised in the previous 12 months," Sanyati concluded.