Civils and construction group Erbacon said on Friday that it expects headline earnings per share and basic earnings per share and for the six month period to August 31, 2010, would be at least 65% lower than that of the prior corresponding period.

Erbacon said its reduced performance followed on from previous comments it made on the construction sector and in particular on the growth prospects for the construction sector, in the short to medium term, being reliant on the momentum of government's budgeted infrastructure spend programme.

It noted heightened competition in the industry and lower margins would impact the current financial year of Erbacon.

"The effect of the above, especially within the Civils Construction - Coastal division, has resulted in a low throughput of base workload from the public sector in the first half year.

In addition, the Civils Construction - Inland division, comprising Civcontract Civils, experienced a delay in the mobilization of certain key contract awards, also mainly affecting the first half year," the group said.

Erbacon said start-up costs in respect of the newly established Erbacon Roads and Earthworks venture, preference share interest and contract amortization charges, were incremental costs that would feature in the financial results to August 31, 2010.

The group added that earnings would also be impacted as a result of the increase in the weighted average number of ordinary shares in issue, namely 192,959,500 ordinary shares, from 136,073,694 ordinary shares in 2009, an increase of 41,8%.

Erbacon expects to release its results on about October 18, 2010.