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Trading Statement and Business Update for the six-month period to 31 December 2017
MURRAY & ROBERTS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1948/029826/06
JSE Share Code: MUR
ADR Code: MURZY
ISIN: ZAE000073441
(“Murray & Roberts” or the “Company” or “Group”)
TRADING STATEMENT AND BUSINESS UPDATE FOR THE SIX-MONTH PERIOD TO 31 DECEMBER
2017
In accordance with paragraph 3.4(b) of the Listings Requirements of the JSE, a company is required to
publish a trading statement as soon as it is satisfied, that a reasonable degree of certainty exists, that the
financial results for the next period to be reported on, are likely to vary by at least 20% from the previous
corresponding period.
Accordingly, Murray & Roberts advises stakeholders that its interim financial results for the six months to
31 December 2017 are expected to show an improvement of at least 20% in diluted and basic earnings
per share (“EPS”) and headline earnings per share (“HEPS”) respectively, when compared to the previous
corresponding period to 31 December 2016.
Stakeholders are advised that a further trading statement will be released on the Stock Exchange News
Service of the JSE Limited (“SENS”), as soon as there is a reasonable degree of certainty as to the likely
range by which the Company’s EPS and HEPS are expected to increase.
BUSINESS UPDATE
Murray & Roberts is a multinational engineering and construction group, with a focused portfolio of
businesses providing services primarily in the natural resources market sectors of metals & minerals, oil
& gas, and power & water. The Group is no longer active in civil and building construction and is listed
under the Diversified Industrials subsector of the JSE Limited.
Oil & Gas – This business platform is expected to maintain its financial performance in line with the
previous reporting period, within the context of a market presenting limited opportunity considering low
levels of investment by energy producers. However, the Group is pleased to note the stabilisation in the
crude oil price around US$70 per barrel and the general improvement in market outlook for LNG demand.
The Company expects improved trading conditions in the medium term, when investment by global energy
producers are expected to return, supported by increasing demand from China and Japan. Whilst project
opportunity in the primary oil and gas markets is limited, projects are being pursued in the complementary
and growing infrastructure sector in Australia.
Progress is being made with the potential acquisition of a small oil and gas engineering and construction
project implementer in the USA.
Underground Mining – This business platform is expected to report an increase in earnings compared to
the previous reporting period, as it continues to deliver strong results across all three main geographic
regions – Australasia, Africa and the Americas. Based on market research guidance, the Group expects
a sustained improvement in commodity prices and subsequent increase in capital spending by mining
companies to represent long-term upside for this business. Tendering departments are currently
experiencing a very high level of activity.
After being delayed for several years, the Kalagadi project in South Africa has received a notice to proceed
and mobilisation for this project is underway.
Power & Water – The boiler erection work on the mega power station projects at Medupi and Kusile is
expected to be largely completed by the end of the 2018 calendar year. Efforts are underway to replenish
the platform’s order book, both in South Africa and the rest of sub-Saharan Africa, with a particular focus
on prospects in complementary markets such as mining, pulp and paper, chemicals and energy. Market
conditions remain challenging and highly competitive, as the large new power projects in South Africa
have been delayed, with no other large alternative project opportunities identified for the short to medium
term.
The water business is experiencing increasing demand for its services in the Western Cape, but it is not
of sufficient scale to materially and positively impact the platforms financial performance.
Investments - The acquisition of a further 17% shareholding (total shareholding now at 50%) in the
Bombela Concession Company (RF) (Proprietary) Limited (“BCC”) was concluded on 8 December 2017
and the subsequent increase in the fair value adjustment of this investment was recorded. This investment
is yielding strong returns and the Group continues to explore other investment opportunities in projects to
complement its three business platforms.
Middle East – As previously reported, the Group has decided to exit this market and is progressing well
to close out its remaining business obligations. The Group is pleased to report that the last four projects
will be completed by end-June 2018 and no further material losses are envisaged from this region.
The Dubai Airport arbitration hearing was concluded towards the end of the 2017 calendar year and the
tribunal’s ruling is expected by May 2018.
STATEMENT OF FINANCIAL POSITION
As at 31 December 2017, the Group expects to report cash, net of debt, of not lower than R1,3 billion
(31 December 2016: R1,1 billion). In the period under review, the acquisition of the additional 17%
shareholding in BCC, at a value of R0,4 billion, was funded from the Group’s cash resources.
SHARE REPURCHASE PROGRAMME
The Group’s R250 million share repurchase programme, announced on SENS on 30 June 2017, was
terminated at the annual general meeting of shareholders held on 2 November 2017 as a result of the
Group’s major shareholder, Aton Austria Holding GmbH, voting against the special resolution proposed to
authorise the directors of the Company to repurchase shares issued by the Company. During the period
3 July 2017 and 1 November 2017, a total of 2.46 million Murray & Roberts’ shares were repurchased in
the open market at an average price of R15.36 per share, totalling a value of R37.8 million, which
represents approximately 15% of the planned repurchase programme value.
PUBLICATION OF INTERIM FINANCIAL RESULTS
Murray & Roberts intends to publish its interim financial results for the six months to 31 December 2017
on SENS on Wednesday, 28 February 2018 before 17:00 (CAT).
Shareholders are advised that the financial information on which this trading statement is based has not
been reviewed and reported on by the Group’s external auditors.
Bedfordview
2 February 2018
Sponsor: Deutsche Securities (SA) Proprietary Limited
Date: 02/02/2018 11:00:00 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
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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,
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