Order book expected to support business growth next year for Murray & Roberts
Groups order book grows by 60% to R50.8bn
Murray & Roberts (M&R) said on Wednesday it expected its strong order book to support growth in the 2021 financial year because of new contracts secured by the oil and gas business.
This will enable the unit to “again become a meaningful contributor” towards group earnings in the medium term.
M&R, which exited the troubled South African construction industry when it sold its infrastructure and building businesses in 2016, said its order book, which includes a number of multiyear projects, increased by 60% to R50.8bn.
In recent years, M&R spread its reach mainly through acquisitions in each of its business platforms – Oil &Gas, Underground Mining and Power & Water. The move was meant to mitigate market volatility in the different sectors.
The company, headed by CEO Henry Laas, said revenue from continuing operations increased by 11% to R10.8bn for the six months to end December 2019, compared to R9.7bn in the previous year, while operating profit from continuing operations increased by 15% to R419m during the period.
“Murray & Roberts has now established a stable base from which it can grow organically and through acquisition,” the company said.
Revenue in the oil and gas unit was unchanged at R3.4bn. The company said there is significant opportunity for new gas projects in Papua New Guinea, though material revenue from these opportunities is unlikely to arise within the next financial year due to the prevailing political uncertainty.
The underground mining platform revenue increased to R6.2bn from R4.9bn and operating profit rose to R353m from R346m.
“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.”
M&R shares were up 4.62% to R9.74 on Wednesday.