Murray & Roberts Maintains Performance Momentum
25 February 2009
Murray & Roberts has released interim results for the six months to 31 December 2008 that maintain its performance momentum over the past number of years, but the company warns that the global economic slowdown may contain growth in the short-term.
Group chief executive Brian Bruce stated, "Our world and markets have entered a period of sudden and unprecedented uncertainty. This is not the time to trumpet past achievements or predict future outcomes. Our job is quite simply to focus on what we do best - the job at hand. To do it diligently and competently, preserve our capital and work to ensure that we emerge strong and ready into a new world order that lies an uncertain time ahead."
The Group has secured R28 billion of new projects in the period to record an order book of R60 billion at 31 December 2008, up 9% from R55 billion at 30 June 2008. This is despite the loss of about R10 billion of project orders across all its markets over the past three months.
Bruce says, "We are of the view that order book volatility may be largely in the past, although there is increased evidence that tender prices are softening on the expectation of a tighter future market and lower input prices".
Compared to the previous comparable reporting period, revenues increased by 44% to R17,6 billion, operating profits by 54% to R1,5 billion, at an improved margin of 8,3%.
Diluted headline earnings per share increased 40% to 302 cents.
Cash holdings at the half-year were constant at R4,3 billion, despite a working capital increase of R670 million.
Commenting on the results, Bruce said "All sectors in the Group showed improved performance in the period, underpinned by the significant order book secured in advance of the recent economic crisis. Although there is some private sector investment weakness, we are still very pleased with the diversity and balance in our business model, which comprises the four major regional markets of South Africa, Middle East, North America and Australasia."
The global balance of work is about 60% domestic South Africa to about 40% international.
"In South Africa, we have seen a considerable slowing in GDP, but remain confident that Gross Fixed Capital Formation growth, particularly Construction Spend, will remain resilient above 10% for the foreseeable future" said Bruce. "This will be primarily in the public sector related to critical infrastructure for Transport & Logistics; Power & Energy and Water & Sanitation. The Group has invested a further R1,3 billion in its own capital expansion programs in the half-year to meet its order book commitment," he added.
Diluted headline earnings per share for the full year to 30 June 2009 is expected to increase in a range between 25% and 35%, including the loss of earnings in the second half-year as a result of the planned disposal of Indonesian subsidiary PT Petrosea out of Australian subsidiary Clough,
"These are challenging economic times and Murray & Roberts has prioritised the preservation of its capital and the selective procurement of new order book in the period ahead," said Bruce. "Murray & Roberts is the leading South African construction and engineering group and its global presence and reputation has enabled access to significant market opportunity and the leadership, partners, resources and skills needed to meet more stringent delivery expectations in what is expected to be a difficult future market," he concluded.
For further information contact:
Mr Ed Jardim
Group Communications Manager
Murray & Roberts Client Service
Tel: +27 (0)11 456 1144
Fax: +27 (0)86 637 0113