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MUR - Murray & Roberts Holdings Limited - Updated trading statement MURRAY & ROBERTS HOLDINGS LIMITED (Incorporated in the Republic of South Africa) Registration number 1948/029826/06 JSE Share Code: MUR ISIN: ZAE000073441 ("Murray & Roberts" or "Group") UPDATED TRADING STATEMENT Shareholders are referred to the trading statement released on SENS on 29 June 2011 whereby the Group advised that it would record a loss and that diluted headline earnings per share and diluted earnings per share for the financial year to 30 June 2011 from continuing operations would be lower by more than 20% relative to the previous comparable period. It was indicated in that announcement that the Group would provide more specific guidance once the financial year end review of major projects was complete. The board of directors of Murray & Roberts ("Board") met on 19 August 2011 to review the financial results for the year to 30 June 2011. Due to the diversity of operations and markets, the Group has remained resilient to conditions in its construction markets. Global mining markets remain buoyant and the Cementation operations performed well in all regions. Clough Limited produced an improved performance from its ongoing operations focussed on the Western Australian LNG and minerals markets. Construction activities in both southern Africa and the Middle East produced reduced performances due to subdued market conditions, which also negatively impacted the results from Construction Products. The Engineering business is primarily focussed on the South African power projects. Following the resolution of certain past disputes and the agreement of revised contractual terms, future profitability on the power projects is now probable. Discontinued operations in steel reinforcing bar manufacture and trading, Johnson Arabia crane hire and Clough`s marine operations all produced losses in the year to 30 June 2011. The sale of discontinued operations is well advanced and management is targeting for the transactions to be concluded by 31 December 2011. The Board has resolved to account for the following charges and contract completion costs for the 12 months to 30 June 2011: 1) Ongoing operations - totalling approximately R2,0 billion made up of: a) SADC Construction - R1,15 billion: * Gautrain Civils Joint Venture ("Gautrain") - Impairment of contract receivables, estimated costs associated with water
ingress rectification work as well as increased costs to complete the project by January 2012; and * Provision for potential Competition Commission ("Commission") penalties for identified possible transgressions by former
subsidiary company executives on contracts following the filing of the Fast Track application to the Commission on 15 April 2011. b) Marine Construction - R580 million of estimated costs to complete the Gorgon Pioneer Materials Offloading Facility ("GPMOF") marine project undertaken by Murray & Roberts in Australia. Project completion is expected by January 2012; c) Middle East - R160 million for impairment of contract receivables in respect of legacy contracts; and d) Construction Products - R80 million impairment of intangible assets. 2) Discontinued Operations - R330 million in respect of impairment of assets held in businesses to be sold or closed, which is in addition to the trading losses of R380 million. As a consequence, it is expected the Group will record a diluted headline loss per share and diluted loss per share of between 380c and 420c from continuing operations for the financial year to 30 June 2011, compared to the previous comparable period of diluted headline earnings per share of 314c and diluted earnings per share of 318c. After accounting for the loss on discontinued operations, it is expected the Group will record a diluted headline loss per share and diluted loss per share of between 495c and 535c and between 575c and 615c respectively for the financial year to 30 June 2011, compared to the previous comparable period of diluted headline earnings per share of 340c and diluted earnings per share of 371c. Notwithstanding the deterioration in earnings in the past financial year, the Group is well positioned for a return to profitability and growth in earnings. Excluding the above mentioned charges and trading losses on discontinued operations, the Group`s earnings before interest and tax amounted to approximately R1,2 billion. Continued high levels of activity in the markets of Cementation and Clough is likely to counter the subdued construction markets in southern Africa and the Middle East. The Group`s order book at 30 June 2011 was R55 billion. The Group`s liquidity position improved substantially from the net debt position reported at 31 December 2010 to a net cash position at 30 June 2011. Whilst future revenue flows are anticipated, funding required to complete the Gautrain and GPMOF projects over the next six months is likely to again place the Group in a net debt position by 31 December 2011. Bombela Concession Company has submitted its Statement of Case in connection with the Land Deficiencies and related disputes on the Gautrain Rapid Rail Link project. The Board and management remain committed to the resolution of all contractual disputes and collection of resultant claims including Dubai International Airport, GPMOF and Medupi Civils Work. As previously disclosed to shareholders, adjudication of these extremely complex legal and financial claims and variation instructions within major projects have yet to be finalised, and are subject to arbitration and/or negotiation. Potential exists for a materially higher or lower amount being finally awarded compared to that recognised in the Statement of Financial Position at 30 June 2011. The financial information on which this trading statement is based has not been reviewed or reported on by the Group`s external auditors. Murray & Roberts will publish its results for the financial year to 30 June 2011 on or about Wednesday 31 August 2011. Bedfordview 19 August 2011 Sponsor: Deutsche Securities (SA) (Pty) Ltd Date: 19/08/2011 13:28:02 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
