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