MURRAY & ROBERTS HOLDINGS LIMITED - Interim Results for the 6 Months Ended 31 December 2019
04 March 2020
Johannesburg, 4 March 2020 – Murray & Roberts today announced its interim results for the six months ended 31 December 2019.
- Financial results:
- Revenue from continuing operations increased by 11% to R10,8 billion (FY2019 H1: R9,7 billion)
- Earnings before interest and tax for continuing operations increased by 15% to R419 million (FY2019 H1: R365 million)
- Diluted continuing headline earnings per share decreased by 4% to 49 cents (FY2019 H1: 51 cents)
- Cash, net of debt, before IFRS 16 adjustment, decreased to R758 million (FY2019 H1: R1,0 billion), and after IFRS 16 adjustment, to net debt of R128 million
- Order book increased by 60% to R50,8 billion (FY2019 H1: R31,7 billion)
- The robust, quality order book includes several multi-year projects.
- Strategic acquisitions concluded in FY2019 all performed well and in line with expectations.
- No fatal incidents recorded although the lost-time injury frequency rate (“LTIFR”) deteriorated to 1.12 (FY2019 H1: 0.63).
FINANCIAL REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Henry Laas, Murray & Roberts Group Chief Executive, comments:“Over the past number of years, Murray & Roberts transformed into a multinational specialised engineering and construction Group, delivering projects across five continents. The New Strategic Future strategy, underpinned by the philosophy of Engineered Excellence, included the disposal of non-core businesses and refocused the Group on the natural resources sector. The Group returned to profitability during a period of prolonged adverse market conditions and resumed paying annual dividends. Murray & Roberts has now established a stable base from which it can grow organically and through acquisition.”
Revenue from continuing operations increased by 11% to R10,8 billion (FY2019 H1: R9,7 billion).
Earnings before interest and tax for continuing operations increased by 15% to R419 million (FY2019 H1: R365 million). Attributable earnings decreased by 12% to R163 million (FY2019 H1: R186 million), following an increase in interest expense, due to funding of acquisitions, the implementation of IFRS 16 and a cyclical increase in working capital.
Cash, net of debt, before IFRS 16 adjustment, decreased to R758 million (FY2019 H1: R1,0 billion), and after IFRS 16 adjustment, to net debt of R128 million.
The order book increased by 60% to R50,8 billion (FY2019 H1: R31,7 billion).
In terms of the Group’s dividend policy, the board of directors of the Company (“Board”) will consider a full-year dividend post year-end. The Group aims to maintain a stable annual dividend, which may be supplemented from time-to-time with a special dividend. The dividend will be subject to the Group’s financial position and market circumstances.
Oil & Gas Platform
Revenue was steady at R3,4 billion (FY2019 H1: R3,4 billion) and a break-even in earnings before interest and tax (FY2019 H1: break-even) was reported in line with expectations. Revenue in the period under review was insufficient to realise an operating profit. The order book increased significantly to R30,6 billion (FY2019 H1: R4,4 billion), mainly due to the award of the multi-year Snowy Hydro project in Australia and the Next Wave project in the United States. The order book, however, lacks orders with sufficient short-term revenue recognition potential and is expected to support revenue growth in FY2021.
Underground Mining Platform
The platform is performing well across all three regional businesses – Africa, Australasia and the Americas. Revenue increased to R6,2 billion (FY2019 H1: R4,9 billion) and operating profit increased to R353 million (FY2019 H1: R346 million). The order book decreased to R19,6 billion (FY2019 H1: R25,7 billion), although several large projects are reflecting in the pipeline. The growth experienced in capital investment in the mining sector over the past three years appears to be levelling off and the commodity cycle might have reached a plateau.
Power & Water Platform
Revenue decreased to R1,2 billion (FY2019 H1: R1,4 billion) and the order book decreased to R0,6 billion (FY2019 H1: R1,6 billion). Operating profit of R19 million (FY2019 H1: R3 million) was reported. The decrease in revenue and order book is reflective of the Medupi and Kusile projects reaching completion, with limited new fixed direct investment occurring in the primary markets in which the platform operates in South Africa. The exception is the transmission, distribution and substation markets where several projects in South Africa, Mozambique, Botswana, Namibia and Angola are at advanced stages of development and implementation. The platform has been awarded the Athlone wastewater project for the City of Cape Town, which will contribute towards earnings in the new financial year.
The Group’s investment in the Bombela Concession Company delivered earnings of R197 million (FY2019 H1: R114 million). This follows a revaluation of the concession after several operational risks were successfully mitigated.
Over the past few years, a stable foundation was established through the implementation of the Group’s New Strategic Future plan and the Group is starting to gain momentum as evidenced by the significant growth in its order book.
The strong order book is expected to support growth as from FY2021 as the Oil & Gas platform has now secured a base load of work for the new financial year, which should enable it to again become a meaningful contributor towards Group earnings in the medium term. The Underground Mining platform is expected in the short term, to at least maintain earnings at current levels.
We remain optimistic about the longer-term outlook for the natural resources markets and the selected infrastructure markets should bring some mitigation to the impact of cyclicality in the natural resources market.
*Please note that this media statement contains extracts from the full reviewed interim financial results for the six months ended 31 December 2019 and should be read in conjunction with the full reviewed interim financial results available on www.murrob.com.
Group Investor and Media Executive
This announcement includes certain various “forward-looking statements” within the meaning of Section 27A of the US Securities Act 10 1933 and Section 21E of the Securities Exchange Act of 1934 that reflect the current views or expectations of the Board with respect to future events and financial and operational performance. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including, without limitation, those concerning: the Group’s strategy; the economic outlook for the industry; and the Group’s liquidity and capital resources and expenditure. These forward-looking statements speak only as of the date of this announcement and are not based on historical facts, but rather reflect the Group’s current expectations concerning future results and events and generally may be identified by the use of forward-looking words or phrases such as “believe”, “expect”, “anticipate”, “intend”, “should”, “planned”, “may”, “potential” or similar words and phrases. The Group undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after the date of this announcement or to reflect the occurrence of any unexpected events. Neither the content of the Group’s website, nor any website accessible by hyperlinks on the Group’s website is incorporated in, or forms part of, this announcement.
About Murray & Roberts
Murray & Roberts is a leading engineering and construction services group of companies.
It has delivered infrastructure projects throughout South and Southern Africa for more than 115 years, and is today recognised as a multinational engineering and construction group.
The Group achieves this by focusing its expertise and capacity on delivering sustainable project engineering, procurement, construction, commissioning, operations and maintenance solutions.
The Group delivers its capabilities into three global primary market sectors: oil & gas; metals & minerals and power & water. The Group disposed of its infrastructure businesses in April 2017 and no longer delivers any civil and building construction projects.
Murray & Roberts is headquartered in Johannesburg, South Africa, and is listed on the JSE Limited. It has offices in:
- South Africa, Mozambique, Zambia and Ghana
- Australia and South Korea
- North America:
- USA and Canada
Murray & Roberts is a group of world-class companies and brands aligned to the same purpose and vision, and guided by the same set of values.
For more information about Murray & Roberts, please visit www.murrob.com