SIMPHIWE MBOKAZI Orders flood in for revised M&R
Substantial 60% in growth to R50.8bn in 6 months a testimony to its restructuring
edward.west.co.za
MURRAY & Roberts’ (M&R) order book increased a substantial 60 percent to R50.8 billion in the six months to December 31, testimony that a substantial restructuring over the past few years has gained momentum.
M&R directors said at the release of interim results yesterday that it was a “robust, quality order book” that included “several multi-year projects.”
The group said the order book was expected to support growth from the 2021 financial year, as the Oil & Gas platform had secured a base load of work which should enable it to again become a meaningful contributor towards its earnings.
It said the platform secured an order book of R30.8bn, the Underground
Mining Platform R19.6bn, while the south and southern Africa focused Power & Water Platform’s order book was at R0.6bn.
Oil & Gas Platform revenue was steady at R3.4bn in the six months and a break-even in earnings before interest and tax was reported in line with expectations.
Its order book had increased significantly from R4.4bn, mainly due to the award of the multi-year Snowy Hydro project in Australia and the Next Wave project in the US.
The Underground Mining platform was expected in the short term, to at least maintain earnings. The platform was performing well across all three regional businesses – Africa, Australasia and the Americas.
Revenue from this platform increased to R6.2bn (R4.9bn) and operating profit increased to R353m (R346m).
The Power & Water Platform revenue fell to R1.2bn (R1.4bn). Operating profit of R19m (R3m) was reported.
A decrease in revenue and order book for this platform reflected the Medupi and Kusile projects reaching completion, with limited new fixed direct investment occurring in the markets in which the platform operates.
The exception was the transmission, distribution and substation markets where several projects in South Africa, Mozambique, Botswana, Namibia and Angola were at advanced stages of development and implementation.
The liquefied natural gas projects in Mozambique were also presenting opportunities, but only from late in the 2021 financial year.
“We remain optimistic about the longer-term outlook for the natural resources markets and selected infrastructure markets should bring some mitigation to the impact of cyclicality in the natural resources market,” M&R’s directors said.
Group revenue from continuing operations increased 11 percent to R10.8bn. Operating profit was up 15 percent to R419m. Attributable earnings fell by 12 percent to R163m. Diluted continuing headline earnings per share fell by 4 percent to 49 cents.
Net asset value decreased to R12 per share from R13 per share at the end of the 2019 first half.
A dividend would be considered post year-end.
M&R shares rose 4.62 percent on the JSE yesterday to close at R9.74.
AFRICAN Oxygen (Afrox) surged 6.19 percent to R20.43 on the JSE yesterday after the group reported a double-digit growth in earnings for the year to end December.
The group said its profits were bolstered by the R1 billion health care contract it won to supply oxygen to the country’s public hospitals for five years and the recovery from equipment impairments during the prior year.
It said its earnings before interest and taxes rose 45.5 percent to R867 million from R596m last year on the public healthcare business, recovery of cost inflation through pricing, efficiencies from restructuring and improved plant performance.
The group said it would invest in high-tech equipment and installations to meet the growing demand within the public healthcare sector.
Afrox said it would return a 101 cents dividend to shareholders in line with the 100c total dividend it had paid in its year to end-December 2017.
It said revenue increased 0.6 percent to R6.09bn as a result of volume growth in certain sectors of the business and successful recovery of cost inflation from effective pricing management.
“Adjusted for the impact from the change in Liquefied Petroleum Gas market prices of R96m, total revenue growth was 2.3 percent,” the group said.
Afrox managing director Schalk Venter said despite the deterioration in the socio-economic environment, load shedding in the late fourth quarter and a shortage in supply during the second quarter, the company showed its resilience during the year.
Afrox said it aimed to extend its installations in public hospitals in four other provinces.
The group said earnings per share increased by 41.2 percent to 204.4c a share and the group declared a final cash dividend of 46c a share, up from last year’s 25c.