Dip in oil, gas earn­ings hits M&R’s bot­tom line

The Star Late Edition - - COMPANIES - Roy Cokayne

MUR­RAY & Roberts’ (M&R) earn­ings from con­tin­u­ing op­er­a­tions were dented in the six months to De­cem­ber by ma­te­rial de­cline in earn­ings from the oil and gas sec­tor and the pro­vi­sion of ad­di­tional costs to close out projects and the busi­ness in the Mid­dle East.

The listed con­struc­tion and engi­neer­ing group said yes­ter­day that it also did not have any ma­te­rial for­eign ex­change gains in the pe­riod.

It said it ex­pected its di­luted head­line earn­ings a share for the six-month pe­riod to be be­tween 65 per­cent and 75 per­cent lower than the re­stated 93c in the pre­vi­ous cor­re­spond­ing pe­riod.

That equates to di­luted head- line earn­ings a share for the pe­riod of be­tween 23c and 33c.

The group said it also in­curred a net present value charge of R170 mil­lion for its dis­con­tin­ued op­er­a­tions, which was as­so­ci­ated with the vol­un­tary re­build pro­gramme agree­ment en­tered into by seven listed con­struc­tion com­pa­nies with the gov­ern­ment. R314m sale This item is listed un­der dis­con­tin­ued op­er­a­tions be­cause M&R re­ported in Novem­ber it had sold its south­ern African in­fra­struc­ture and build­ing busi­ness to a con­sor­tium led by the wholly black-owned South­ern Palace Group for R314m.

The agree­ment with the gov­ern­ment set­tled out­stand- ing and po­ten­tial civil dam­ages claims aris­ing from set­tle­ment agree­ments for col­lu­sion and bid-rig­ging reached with the Com­pe­ti­tion Com­mis­sion dur- ing the con­struc­tion fast-track set­tle­ment pro­gramme.

M&R said the ad­di­tional cost pro­vided for the busi­ness in the Mid­dle East was not ex­pected to be re­peated in the sec­ond half of the year while the vol­un­tary re­build pro­gramme agree­ment was “a one-off cost in­curred”.

The group added that the nat­u­ral re­source mar­ket sec­tors were cycli­cal and it would trade through this dif­fi­cult pe­riod.

“The group’s com­pa­nies are re­spected for their ca­pa­bil­i­ties and ser­vices and the group is well po­si­tioned for the ex­pected up­turn in the com­mod­ity cy­cle in the medium to long term,” it said.

M&R ex­pects to re­lease its in­terim fi­nan­cial re­sults on Wed­nes­day.

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