BENGALURU (India) • Ground engineering contractor Keller Group said yesterday it would exit its heavy foundations activities in Singapore and Malaysia, and scale back in Brazil and South Africa, leading to 700 job cuts.
Keller Group expects to take an exceptional restructuring charge of about £57 million (S$100.9 million) in its full-year results.
"We are taking tough but necessary actions to reduce our cost base and exposure to unprofitable market segments, and we are also sharpening our control regime," chief executive officer Alain Michaelis said in a statement.
Keller, whose history dates back to 1860, said its heavy foundations activities in Singapore and Malaysia were facing heavy competition and pricing pressure.
Heavy foundations activities involve laying the foundations for structures whenever weak soils have little capacity to resist an existing load or a change in existing load.
Keller, which provides systems and services for monitoring the safety of buildings, ground improvement equipment and cable systems to the construction industry, started a review of its Asia-Pacific business last month, citing deteriorating conditions in South-east Asian markets, especially Malaysia.
The company said in July its business was hit in Malaysia, where Prime Minister Mahathir Mohamad's surprise election win led to the country putting some major infrastructure projects on hold.
Number of job cuts as a result of Keller Group stopping heavy foundations activities in Singapore and Malaysia, and scaling back in Brazil and South Africa.
Keller also flagged challenging market conditions in Brazil and South Africa, hurt by geopolitical tensions, and said it was taking "proactive measures" to scale back operations in the difficult markets.
"It is encouraging to see management reacting quickly to events in its end markets and we take some comfort from the fact that the net cash costs are minimal," investment bank Liberum said in a note.