Pretoria - The strength of the rand and a sharp reduction in interest income because of a depletion of cash resources knocked the earnings of Concor, the listed construction and manufacturing group, in the year to June.

Headline earnings a share fell more than 15 percent to R1.329 from R1.569 in the previous year despite a 1 percent growth in revenue to R1.39 billion and a 6.4 percent rise in operating income before interest to R24.6 million.

The company's effective tax rate for the year decreased to 5 percent from 38 percent, primarily because of the group's ability to use accumulated tax losses to offset profits earned in Botswana and Mozambique.

Jan Engelbrecht, Concor's acting chief executive, said the strength of the rand adversely affected capital expenditure in the mining sector, which had a negative impact on the workload in the company's civils and engineering divisions.

This resulted in a depletion of cash resources during the year and a reduction in net interest income.

Net income earned plummeted 94 percent to R633 000 from R11.1 million.

An unchanged dividend of 30c a share was declared.

Construction revenue declined by more than 4 percent to R1.08 billion and income before tax by almost 77 percent to R5.3 million from R22.8 million.

However, manufacturing revenue was almost 10 percent higher at R293 million and income before taxation grew by 20 percent to R18.9 million.

There was a geographical shift in Concor's revenue, with revenue from South Africa rising to 91 percent from 84 percent in the previous year and revenue from the rest of Africa declining to 9 percent from 16 percent.

Kobus Bester, Concor's financial director, said the company had not decided not to work outside South Africa and it was still tendering cautiously on contracts but had not been "successful of late".

Engelbrecht said the civils division had an extremely difficult year, with very little work secured from the mining sector.

The construction industry was expected to benefit from the government's promised infrastructure spending, including for the 2010 World Cup.

Concor closed 10c down at R8 yesterday. The construction sector improved 0.98 percent.