The engineering and construction group is facing a take-over bid by the German family-owned Aton Group, which already owns about 44 percent of the local-based groups’ shares.
The order book has grown in the interim period, increasing by just over 5percent to R31.7billion compared with R30.1bn at the end of the 2018 year, while the figure was R22.1bn at the same time last year.
M&R’s shares were trading one cent higher at R13.81 a share late yesterday afternoon, well below Aton’s R17 a share cash offer price, which indicates M&R shareholders might well accept the Aton offer.
In its defence, M&R directors said the independent board had “refreshed” the valuation of the group according to latest market developments, and the “fair value” share price range should be between R20 and R22 a share.
The sharp rise in attributable income was in spite of a 17percent decline in revenue from continuing operations to R9.8bn.
The board intends to consider a fully-year dividend post year-end.
Significant growth was recorded in the Underground Mining platform order book. A “substantial increase” in the Oil & Gas platform was expected in the second half.
The global Underground Mining Platform business was performing well.
This platform’s order book had increased to R25.7bn.
The platform is engaged in projects in Australia, Indonesia, Mongolia, US, Canada, Mexico, South Africa and Zambia. The Power & Water platform’s scope of work on the Medupi power station had been completed and work on Kusile power station would continue into 2020.
“For several years platform earnings were underpinned by the contribution from these two projects. The lack of meaningful work to replace Medupi and Kusile will result in reduced platform revenue and earnings,” the group directors said. The Baseload Coal Independent Power Producer Procurement Programme in South Africa continued to be delayed.
As a result, the platform was targeting opportunities in other sectors of the power market, such as power plant repair and maintenance work in South Africa, as well as high voltage transmission infrastructure projects in South Africa and sub-Saharan Africa.