M&R to sell building, manufacturing units to focus on global resources

Construction and engineering group Murray & Roberts (M&R) has announced its intention to sell its infrastructure and building units, as well as manufacturing business Genrec as part of ongoing moves to focus on the global natural resources markets of oil and gas, metals and minerals and power and water.

CEO Henry Laas said in a statement that negotiations with prospective buyers for the businesses were at an advanced stage and the infrastructure and building and Genrec units had been classified as “discontinued operations” in its financial statements.

The transactions would exclude M&R’s investment in the Bombela Concession Company, Bombela Civil Joint Venture and Bombela Operating Company, as well as the operations in the Middle East, where current projects are expected to be completed by December 2017 and where no new projects were being pursued.

In the year to June 30, the Southern Africa construction operations achieved an operational profit of R68-million, slightly up on the R56-million achieved in 2015. Genrec, however, reported a loss of R108-million, from a profit of R18-million last year. The loss was attributed to an impairment of property, plant and equipment, as well as operating losses.

M&R reported revenue from continuing operations of R26-billion during the year, up on the R24-billion reported last year, but attributable earnings fell to R753-million from R881-million.

Diluted continuing headline earnings a share decreased to 175c from 195c.

The group’s order book for continuing operations was also lower at R28.7-billion, from R33.3-billion last year, owing to a reduced backlog for its underground mining platform in Africa and the oil and gas division.

M&R also warned that operational earnings would fall during its 2017 financial year.