Murray & Roberts’s (M&R) share price sank 5.23% yesterday after releasing a trading update showing it expects to report a major loss for the six months to December 31, after it encountered liquidity problems last year.
The interim headline loss per share is expected to slump to between 323 to 321 cents per share for the interim period compared with 13 cents per share profit at the same time, the year before.
Shareholders have taken a cold bath this year as M&R’s financial position tightened – the R2.51 that it traded at yesterday is well below the R12.60 that the share traded at a year ago.
The diluted headline loss per share from continuing operations was expected to fall to between 33 to 28 cents, compared with a 29 cents profit a year ago.
M&R’s liquidity has over 12 months to the end of last year come under pressure from the impact of the pandemic and the conflict in Ukraine, especially on its Australian subsidiary Clough’s portfolio of fixed-price contracts.
The group in October put a key Australian subsidiary, Murray & Roberts Pty Ltd (MRPL), under administration.
Then in December, the planned disposal by M&R to Webuild of its interests in Clough, the proceeds of which were planned to help deleverage M&R was terminated. Earlier this month, the group said the administration over Clough had been lifted and transfer of the company to Webuild took place on February 18, but there was no mention of a price.
Regarding the liquidity issues, the group said that specifically the disruption to supply chains, delays in project schedules and associated deferrals of milestone payments, as well as global inflation had added to an already difficult trading environment.
As a consequence of the voluntary administration, the group lost control of MRPL and its subsidiaries, which include RUC Cementation Mining Contractors, and MRPL and its subsidiaries were deconsolidated from the group from December 5, 2022.
The group is much smaller following the loss of its investment in MRPL and its subsidiaries, “and is currently navigating a challenging period considering its debt levels”, it said.
Options were being evaluated to de-lever the balance sheet.
As at December 31, 2022 the order book was R16.1 billion (2022 H1: R18bn excluding discontinued operations), and the project pipeline remained strong, M&R said.
The mining platform represents R14.1bn of the total order book and the power, water & industrial (PWI) platform represents R2bn.
M&R said its directors remained optimistic about prospects for its multinational mining platform, and the new opportunities for the PWI platform, specifically in the renewable energy and transmission sectors in South Africa. The interim results are expected to be published during March.
BUSINESS REPORT