Basil Read Reports Loss as Rains, Bitumen Supply Curb Roads UnitKamlesh Bhuckory
Basil Read Holdings Ltd., a South African construction company, reported a loss for the year as strikes, a bitumen-supply shortage and rains hindered its road-projects unit.
The net loss was 170.4 million rand ($18 million) for the 12 months through December and compares with profit of 141 million rand profit a year earlier, the Johannesburg-based company said in a statement today. Revenue rose 3.8 percent to 5.5 billion rand. Road projects in Botswana and in South Africa made losses of 210 million rand, it said.
Africa’s largest economy expanded 2.5 percent in 2012, the slowest pace since a 2009 recession, after a series of mining strikes curbed output.
“It’s disappointing,” Chief Executive Officer Marius Heyns said by mobile phone today. The company will probably return to profit this year, he said.
South Africa’s antitrust authority is probing allegations of collusion by some of the country’s construction companies.
Basil read has raised the provision for the investigation to 75 million rand from 65 million rand, it said.
“It will remove tension,” Heyns said. The investigation will improve confidence among the operators and interactions with the government, he said.
The company is likely to recoup 50 million rand of the 125 million-rand loss incurred by its Sladden International unit on a roads project in Botswana, Heyns said.
Basil Read is starting a bitumen reactor plant in the Western Cape through its SprayPave unit to ease a shortage of the building material that’s derived from crude oil and is used in road construction.
The plant is expected to start output in the second half of 2013, it said.
“We are in negotiations with leading refineries to secure the supply of crude oil short residue,” the company said.
The stock declined for the first time in four days yesterday, losing 0.9 percent to 11.70 rand, paring the gain this year to 7.8 percent.