Mur­ray & Roberts shares gain on news of lit­tle im­pact of Covid-19 on op­er­a­tions

Pretoria News - - BUSINESS REPORT - ED­WARD WEST ed­ward.west@inl.co.za

MUR­RAY & Roberts’s share price gained 19.4 per­cent to R6.90 on Fri­day af­ter­noon after it as­sured the mar­ket that the global engi­neer­ing projects it was busy with had ex­pe­ri­enced lit­tle im­pact from the spread of the coro­n­avirus to date.

Later in the day, it

14.19 per­cent to R6.60.

The group said although it was too early to pro­vide an ac­cu­rate es­ti­mate of the po­ten­tial ef­fect on earn­ings this and next year, it did not an­tic­i­pate any of its projects be­ing can­celled.

After a week of ma­jor global mar­ket volatil­ity, the com­pany’s share price was, nev­er­the­less, 28 per­cent lower than the price it traded at the pre­vi­ous Fri­day.

The in­ter­na­tional min­ing and re­sources engi­neer­ing group, with projects mainly in Aus­trala­sia, the Amer­i­cas and sub-Sa­ha­ran Africa, said its bal­ance sheet was strong, and a R50 bil­lion or­der book at De­cem­ber 31 was ex­pected to sup­port growth through the 2021 fi­nan­cial year.

Its Oil and Gas Plat­form had se­cured a base load of work for the new fi­nan­cial year, which was ex­pected to en­able the plat­form to again be­come a mean­ing­ful con­trib­u­tor to group earn­ings. closed up

The Un­der­ground Min­ing Plat­form was ex­pected, in the short term, to at least main­tain earn­ings.

In the Power and Water Plat­form, a project for Sappi in South Africa re­quired ad­di­tional welders from Thai­land, but this work would now be done by a smaller group of spe­cialised lo­cal welders, with the work ex­pected to be com­pleted a few weeks later than planned.

In the Oil and Gas and Un­der­ground Min­ing Plat­forms, a joint ven­ture with a lo­cal part­ner for Rio Tinto’s Oyu Tol­goi project in Mon­go­lia, was near stand­still from sup­ply chain con­straints, mainly from China, and travel re­stric­tions, with a large part of the work­force on leave to re­duce costs dur­ing the un­pro­duc­tive pe­riod. The de­lay was ex­pected to re­sult in rev­enue be­ing de­ferred.

At the Bombela Con­ces­sion Com­pany, rider­ship on Gau­train was down sig­nif­i­cantly, which might im­pact in­vest­ment re­turns in the Bombela Con­ces­sion Com­pany.

The group is not un­der­tak­ing any oil projects, although the weak oil price would im­pact the gas sec­tor and the group’s Oil and Gas Plat­form.

It was pos­si­ble the weak oil price may de­lay in­vest­ment in gas projects that the group had been tracking in its project pipe­line.

The Oil and Gas Plat­form was cur­rently fo­cus­ing on tra­di­tional in­fra­struc­ture and met­als and min­er­als for the bulk of its R30bn or­der book, with only two sig­nif­i­cant oil and gas sec­tor projects on the book.

The Next Wave green­field eth­yl­ene-to-alky­late pro­duc­tion fa­cil­ity in the US was un­likely to be im­pacted by the weak oil price, as was com­mis­sion­ing the Ichthys liq­ue­fied nat­u­ral project in Aus­tralia.

The group had ten­dered for sev­eral gas-fired power sta­tion projects in Aus­trala­sia, and a low oil or gas price would im­prove the vi­a­bil­ity of these projects, and the group felt con­fi­dent of se­cur­ing some of these ten­ders in the short term.

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MUR­RAY & Roberts said its bal­ance sheet was strong, and a R50 bil­lion or­der book at De­cem­ber 31 was ex­pected to sup­port growth through the 2021 fi­nan­cial year.

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