Murray & Roberts is upbeat about entering a new chapter after the loss of its Australian business, saying it will focus on stabilising its existing mining and energy platforms while working off debt.
Speaking to Business Day after the release of its results for the year to end-June, CEO Henry Laas said the developments in Australia are “behind” it, with these results illustrating the full effect of the deconsolidation of those businesses.
“The market must understand that the uncertainty about the developments in Australia, which occurred in the past financial year, are now behind us and there is no reason for anybody to be confused about the group’s present position,” Laas said.
“From a strategic point of view, what we have to do over the next year or two is de-lever, stabilise, and then re-establish ourselves in the Asia Pacific region for the mining business.”
The group swung into a loss of R3.1bn from a R135m profit, after accounting for the losses in Australia, which saw its equity plunge to R1.8bn from R5.7bn.
In 2020 and 2021, the company was in the process of implementing a large portfolio of projects before the pandemic and subsequent lockdowns struck. Its working capital requirements rose, resulting in its Australian businesses being put under administration in October.
From December 5, MRPL and Clough were removed from the books, which affected the group’s control over RUC Cementation Mining Contractors (RUC), a subsidiary of MRPL.
What remains of M&R is its mining platform, located primarily in North America and SA, as well as its smaller power, industrial and water platform in SA which specialises in power generation and renewable energy.
On Wednesday the group said its continuing operations had recorded profit before tax of R91m, up from R82m in the previous year. Net debt fell to R300m from R1.1bn.
“Those businesses will grow and the plan is to continue providing our services and increase our market share in the regions where we operate,” Laas said. “We believe we will be able to get earnings back to pre-pandemic levels.”
As a provider of specialist mining services, the Johannesburg-based group intends to maintain a presence in the Asia-Pacific region, which was formerly serviced by RUC.
“Our preferred position would be to regain control of that business, but if we are not successful with that we need to launch a new mining business in the Asia Pacific,” Laas said.
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