Murray and Roberts exits construction sector

Posted On Thursday, 25 August 2016 17:22 Published by
Rate this item
(0 votes)

Murray and Roberts will focus on three core sectors in future — underground mining, oil and gas, and power and water, says group.

 Henry_Laas_Murray

Murray and Roberts would focus on three core sectors in future — underground mining, oil and gas, and power and water, the group said on Wednesday in a provisional report for the year ended-June and in a further cautionary notice.

It would dispose of its infrastructure and building businesses and Genrec, a steel- making and engineering services group. The former transaction was far advanced, CEO Henry Laas said. This meant the company would no longer build ports, roads, dams, and buildings, including offices, hotels, and malls in SA.

Instead, it would concentrate on the international natural resources sector, becoming a multinational engineering company. This came as diluted continuing headline earnings per share fell 10% in the period, and attributable earnings dived 15% to R753m from R881m a year earlier. But revenue from continuing operations rose 9% to R26bn from 2015.

“We are not exiting the South African market — it is about exiting a sector,” Laas said. Civil engineering and construction markets in SA were weak since state infrastructure spend was focused on finishing the Medupi and Kusile power stations, and rail projects in SA.

Oil and gas and underground mining had traditionally contributed 80% of group profit, Laas said. The tightened group focus would now be on oil and gas in Australasia and the US and Canada. Underground mining would concentrate on SA and the rest of Africa, Australia, Canada, and the US, he said.

Roelof Brand, a construction market analyst at Avior Capital Markets, said: “Any meaningful growth in revenue will be dependent on a recovery in oil and gas capex spend. I expect earnings to remain under pressure, given the current oversupply in the market and low oil prices.”

Laas said the South African National Roads Agency was one entity that was providing opportunities in construction, but provision of water treatment services was lagging, despite being a government priority.

Source: BD

Last modified on Friday, 26 August 2016 07:29

Most Popular

Rebosis Property Fund retail portfolio delivers excellent operational performance despite a tough market

Nov 11, 2019
Sisa Ngebulana REBOSIS
Rebosis Property Fund, the JSE’s first listed black-managed REIT, today reported its…

Massive property auction on behalf of Telkom

Nov 11, 2019
Agricultural Land Beaufort West
GoIndustry DoveBid SA (GoIndustry) is hosting a massive property auction on behalf of…

African Union for Housing Finance (AUHF) Cape Town declaration provides 5 point plan for african governments to address housing finance shortage

Nov 14, 2019
African Union of Housing Finance
Following the successful completion of their 35th Annual Conference, the members of the…

10 SA REITs are among South Africa’s top listed companies

Nov 15, 2019
Estienne de Klerk SA REIT Chairman
South African REITs (real estate investment trusts) have once again excelled among the…

Balwin Properties Limited marks success of Sub-Saharan Africa’s only Crystal Lagoons amenity

Nov 11, 2019
DJI copy
Balwin Properties Limited (Balwin) in conjunction with Crystal Lagoons B.V. (Crystal…

Please publish modules in offcanvas position.