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BenchA Stefanutti Stocks Publication m Continuous pursuit of higher levels of performance VOLUME 21 | MAY 2019 Construction & Mining business unit celebrates 21-million LTIF man-hours ......................................................... Coastal division undertakes numerous water infrastructure projects ......................................................... M2 bridge rehabilitation underway ......................................................... Standardised systems to support Group’s operational effi ciencies ......................................................... Building Division builds picturesque Northern Views ......................................................... Al Tayer Stocks revamps Atlantis Hotel: The Palm ......................................................... Stefanutti Stocks constructs electrical & instrumentation infrastructure at Booysendal Mine excellence in executionA our vision our mission our values Candour Frank and respectful discussions with the objective of fi nding positive outcomes. Accountability Taking personal responsibility for one’s actions and the resultant outcomes. People relations The value which results in people treating one another fairly and with respect and always being mindful of the human dignity of others. Professionalism The application of a competent, disciplined and meticulous approach to all aspects of business, resulting in performance of high quality and reliability. Excellence A passionate mind-set that puts quality at the forefront of all business activity. g n a E g e d d n a E m d e ynamic p s i l D o g r y e e e n s Embracing openness and fl exibility of mind and an energetic, pro- E active solution-driven attitude. nd Engaged E ed a mpl gis oye er es n Performance management E and feedback Developing our people Transformed and diverse organisation Involved with our people Accountability at all levels Understand the next generation Right people in the right places Live our values Ownership – founder mentality Proper Planning Prevents Poor Performance Stefanutti Customer Relationship Management Stocks Under promise and over deliver Zero harm way Alternative procurement and execution methods Do it right first time Understand clients and project needs Solutions-driven culture F l a s Presence with clients w n l io e t s Lean culture Regular engagement s la E e x R e t c n u ie t Relationships with construction l io partners and supply chain C n Plant & equipment - our pride Simple, efficient standardised processes and procedures B • SS Construções (Mozambique) Lda continues to deliver a sound From the performance and a number of its projects feature in this issue (pp14-16/p24). • The Building KZN division has completed yet another state-of- the-art production facility (p18) and continues work on contracts CEO for Mercedes Benz South Africa in East London in joint venture The South African construction with a number of emerging contractors (p22). sector has been severely • Our Geotechnical division recently completed a design and impacted by the operating construct project for Stefanutti Stocks Swaziland (p28) and has environment for several years. also brought its considerable expertise into play at yet another This has been largely due to deep level foundation contract for a bridge structure (p29). the country’s low economic • Our Coastal division continues to deliver excellent water growth, as well as policy infrastructure projects (pp34-35). uncertainty. The run-up to • Our Civils division is participating in an exciting precast project for the 2019 National General the Nxuba Windfarm (p36). Elections saw a reduction in the number of public and private Safety In January this year our Building KZN division celebrated the milestone of tender opportunities and awards. These factors led to a reduction in contract three-million Lost Time Injury Frequency Rate (LTIFR) hours. The month revenue of R500 million to R9,9 billion for the current fi nancial year. thereafter, the Construction & Mining business unit achieved the incredible Consistent with experiences reported by other construction milestone of 21-million LTIFR hours (articles are on p8). Our management companies, the group has been negatively aff ected by disruptive and and staff remain committed to enhanced health and safety policies and unlawful activities by some communities and informal business forums procedures, and together we strive to constantly improve the group’s in certain areas of South Africa. safety performance. LTIFR rate at February 2019 was 0,02 (Feb 2018: In addition, certain major events had an adverse impact of the group’s 0,11) and the Recordable Case Rate (RCR) was 0,36 (Feb 2018: 0,54). liquidity position. These include persistent delayed payments by the governments of Nigeria and Zambia and diffi culties in converting work in Awards progress into cash. During the second half of the fi nancial year, the liquidation The Annual Fulton Awards will take place at the beginning of June, and I of a contract mining client and the funding of the monthly management would like to wish the teams, including those who entered the Anadarko costs on a large public sector contract for the national energy provider, has development (p14) and Olifants River Arch Bridge (p32) all the best at the placed an additional burden on the cash resources of the group. awards. I would also like to congratulate the Building KZN team that once In terms of IAS 37: Provisions, Contingent Liabilities and Contingent again excelled at the Master Builders annual awards in KZN – including Assets, during the current fi nancial year, the group had to provide receiving the Overall Winner award recognising its outstanding achievement R263 million for these potential unrecoverable monthly management in Health and Safety and Building Excellence (article on p9). Howard costs to complete the project. This resulted in the group reporting an Schwegmann, our Building business unit’s managing director, received the operating loss of R158,0 million. This excludes results from the United Award of Merit, recognising his noteworthy contributions to the industry. Arab Emirates operation, which contributed R66 million towards the share of profi ts of equity accounted investees. Women in Construction Excluding the IAS 37 provision, the group’s operating profi t is We continue to feature some of the women executing excellence within R105 million, all of which is derived from cross border operations. our work place and in this issue we get to know more about junior site Approximately 32% of contract revenue was generated from these engineer Marícia Langa (SS-Construções (Mozambique) and Yolanda operations. Traditionally these markets have been more profi table than du Plessis, our group fi nancial manager (pp6-7) the local market with more available opportunities. In the local market opportunities have become available as a result Stefanutti Stocks Board of improved commodity prices and increased activity in the mining Kevin Eborall will retire as board chairman and a director at the sector. Furthermore, there were a number of notable private sector company’s next Annual General Meeting in August 2019. Zanele investments especially in the industrial sector, which bolstered the Matlala, currently chairman of the Audit, Governance and Risk group’s overall performance and the order book. Committee, will be appointed as board chairman and at the same time The group’s order book is currently R11,5 billion of which 43% step down as chairman of this committee. arises from cross-border work. After twelve years as your CEO, and twenty-three years in the In the short to medium term there are some opportunities in the company I will be retiring from Stefanutti Stocks in August 2019. local market which include surface mining related services in iron- Russell Crawford, currently CEO Designate, will be appointed as CEO ore, platinum, mineral sands and coal sectors and selected open pit and director of the company thereafter. mining contracts predominantly in coal. Further opportunities exist in On behalf of our management team and our board of directors I would petrochemical tank farms, clean fuels, smaller oil and gas projects, like to thank you for your consistent and considerable eff orts and support pipelines, water and sanitation treatment plants as well as warehouses of the group, in particular during what is currently an exceptionally diffi cult and some design and construct opportunities in the building sector. time. This company is incredibly close to my heart and will continue to Cross-border opportunities exist in road and bridge construction, remain a passion of mine. I intend to make my fi nal few months as CEO bulk pipelines, water and sanitation treatment plants and mixed- of Stefanutti Stocks count, and I trust that you will all continue to aff ord use building projects. In the longer term opportunities exist with the Russell and his team the same support that I have enjoyed. planned rollout of the Liquid Natural Gas plant in northern Mozambique and the Lesotho Highlands Water Project. God Bless, Project Highlights • Al Tayer Stocks in the United Arab Emirates currently has a diverse and exciting building projects portfolio (article p10) including the revamp of both the interior and exterior of the iconic Atlantis Hotel: The Palm (p12). 1 in this issue 28 From the CEO 01 Senior Appointments & Promotions 02 Stefanutti Stocks consolidates systems 04 Women in Construction 06 Safety 08 Projects • Al Tayer Stocks 10 • Building 13 • Mining & Mining Infrastructure/Industrial