Orders flood in for revised M&R
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 11percent to R10.8bn. Operating profit was up 15percent to R419m. Attributable earnings fell by 12percent to R163m. Diluted continuing headline earnings per share fell by 4percent 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 4.62percent on the JSE yesterday to close at R9.74.