CAPE TOWN - MURRAY & Roberts subsidiary Clough has been awarded an approximate A$400 million (R4.74 billion) contract for an engineering, procurement and construction scope of work project on the Waitsia Stage 2 development project in Western Australia.
M&R said yesterday that the contract was awarded by Waitsia Joint Venture partners Mitsui E&P Australia and Beach Energy.
The group said that the project would include a new gas-processing plant with a 20-year lifecycle that would convey gas via the nearby Dampier to Bunbury natural gas pipeline.
The Waitsia gas field is ranked as one of the largest gas fields discovered onshore in Australia and is forecast to bring significant economic benefits to the mid-west region from both the construction and operating phases.
Clough’s scope of work relates to a gas-processing plant, including power generation.
“Clough and the client have worked together for two years to optimise the project design. The project is set to commence during the first quarter of the 2021 calendar year,” M&R said.
Last year, the group said that its global portfolio of engineering and mining contracting projects experienced significant Covid-19-related profit impact in the year to June 30, but most of its projects have since resumed operations.
It said a R622m direct profit impact of the pandemic on projects, as well as a range of impairments created a “perfect storm” and that the headline loss per share was likely to be 86 to 74 cents ar share, compared with headline earnings of 80c a share in 2019.
The group said the impairments included an R80m vendor loan relating to the sale of Genrec, now in business rescue, a R63m impairment from goodwill on two group companies due to market uncertainty, and a R46m impairment of uncertified revenue on a claim.
In November, the group said its order book increased to R60.5bn from R54.2bn at the end of the year to June 30, 2020.
This was primarily due to the award of the A$1.5bn TransGrid project, a 50/50 joint venture between Clough and Elecnor, which was announced in October.
Yesterday, M&R said expectations for economic recovery after Covid19 were uncertain and being revised frequently.
The company said it was, however, well positioned to operate through the short- to medium-term uncertainty.
Recently awarded new projects were expected to contribute to earnings in the second half of the 2021 financial year. Financial results for that period were expected to improve compared to the first half.
“The board believes the group will return to profitability in the 2021 financial year and continue its path to earnings growth beyond,” M&R said.
M&R shares closed flat at R8.40 on the JSE yesterday.
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