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.     Supplied
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. Supplied

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

By Edward West Time of article published Mar 23, 2020

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CAPE TOWN - Murray & Roberts’s share price gained 19.4percent 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 closed up 14.19percent 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, 28percent 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 R50billion 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.

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. Supplied


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.

BUSINESS REPORT 

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