Murray & Roberts (M&R) says its headline loss is expected to narrow in the year to end-June, thanks to its turnaround efforts.
The JSE-listed group has been on a bid to recover from the voluntary administration of its Australian businesses in December 2022 and the loss of dividend flows from these businesses created severe liquidity constraints during the year under review.
It has concentrated significant effort into rightsizing its cost structures towards creating financial stability. At the same time it redesigned its operating model and management structure, while reducing overhead expenses everywhere it operated, including the corporate headquarters.
“It is expected that a saving in corporate costs of more than R100m per annum, when compared to the 2023 financial year, will be realised from next year,” M&R said in a statement.
On Wednesday M&R said it expected a headline loss per share of 27c-47c, an improvement of 90%-94% from the previous year.
When excluding the loss from the deconsolidation of MRPL, Clough and RUC, its results from continuing operations are expected to improve by 59%-73% to a loss of as much as 29c per share.
“The group delivered an improved financial performance for the year under review, not only for continuing operations but also at an attributable earnings level which, for the prior year, included losses associated with the deconsolidation of the Australian businesses,” the company said. “The group moved from a net debt position to a net cash position, grew earnings and increased its order book.”
The Johannesburg-based engineering and contracting group said with the help of a group of SA banks, it had implemented a deleveraging plan that resulted in a reduction of its local debt from about R2bn in April 2023 to R409m.
M&R said it was still in contact with the banks about repaying the outstanding debt and was also still in talks with possible financiers.
The group has recently won a string of contracts including a R1.2bn contract to build a 100MWp (megawatt peak) solar photovoltaic renewable energy complex for a mining house in the North West, a mine-building project for $200m (R3.6bn) in South America and an engineering, procurement and construction (EPC) contract worth $200m with a major South American copper producer in April.
Moreover, it flagged that OptiPower was expected to deliver a modest earnings contribution from the 2025 financial year, by capitalising on Eskom’s transmission build plans.
The group said it was confident about being well positioned to seize expansion prospects, primarily through its global mining operations, and starting in the 2027 financial year it expects earnings to rebound to prepandemic levels.
“We are looking forward to the 2025 financial year, as the first year of a re-engineered, revitalised and refocused Murray & Roberts,” it said.
M&R shares slipped 2.81% to R3.11 on Wednesday.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.