South African construction company going from zero to hero

Following a difficult few years, Stefanutti Stocks has bounced back, with profit growth of 727.48% for its 2025 financial year.

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.

To address this, the company embarked on a Restructuring Plan, which has started to bear fruit.

Stefanutti released its results for the twelve months ended 28 February 2025 on Tuesday, 27 May 2025.

These results revealed a significant recovery, with contract revenue from continuing operations up 8% to R7.66 billion.

The company reported an operating profit of R333.37 million, up 59% from the previous year.

This is mainly due to the strong performance of its Inland and Coastal regions, which saw significant growth in both contract revenue and operating profit.

The Inland Region delivered a strong performance with contract revenue and operating profit of R3.3 billion (Feb 2024: R3.1 billion) and R187 million (Feb 2024: R194 million), respectively.

This region’s order book at February 2025 was R3.1 billion, up from R2.2 billion the year before.

Similarly, the Coastal Region showed a significant improvement with an increase in contract revenue and operating profit to R2.0 billion (Feb 2024: R1.2 billion) and R65 million (Feb 2024: R20 million), respectively.

The Coastal Region’s order book at February 2025 was R1.6 billion (Feb 2024: R2.2 billion).

The company’s growth in its other regions was more mixed, with some declines recorded.

For example, the Western Cape Region’s contract revenue was R882 million, down from R1.1 billion the year prior, with an operating profit of R73 million, up from R37 million in 2024.

However, positively, the Western Cape’s order book at February 2025 was R2.7 billion (Feb 2024: R741 million).

Stefanutti’s Africa Region’s contract revenue was recorded at R1.5 billion (Feb 2024: R1.6 billion) with an operating profit of R92 million (Feb 2024: R33 million).

Notably, this includes its R39 million settlement from a recent legal win and a R30 million operating loss relating to its Hyvec joint venture. 

The company noted that, except for its Botswana operations, all remaining operations are performing as expected.

Stefanutti reported earnings from its total operations of 78.60 cents per share, up 727% from the prior year’s 9.50 cents. Its profit for the period grew by 727.48% to R131.45 million.

The company did not declare a dividend for its 2025 financial year.