Murray & Roberts earnings drop on losses in Middle East

Aug 24, 2017

South African engineering and construction group Murray & Roberts reported a 59 percent fall in full-year earnings on Wednesday due to losses in its Middle East business and a settlement with the South African government.

The firm, which sold its infrastructure and building business in April, said diluted headline earnings per share (HEPS) from continuing operations, which include the Middle East business, fell to 72 cents for the year to June 30 from 178 cents the year before.

This was due to a 570 million rand ($43.2 million) loss in the Middle East and a 170 million rand deal with the South African government to contribute to an industry training fund.

Excluding the Middle East business, HEPS rose 8 percent, Murray & Roberts (M&R) said.

The company in May announced plans to dispose of its Middle East business after selling its infrastructure and building unit to Firefly Investments as it shifts its focus to the global natural resources sector.

"Close-out of the business in the Middle East continues to present major risk, but all known project losses have been fully provided for in financial year 2017," M&R said in a statement.

Under CEO Henry Laas, who has championed M&R's expansion into the liquefied natural gas, metals and minerals and power markets as a means of boosting revenues, the group will complete its restructuring in the year to June 2018, it said.

At 1531 GMT, its shares were down 4.34 percent at 13.68 rand.

M&R's order book for continuing operations fell slightly to 26.9 billion rand, while revenue - excluding the Middle East - fell 15 percent to 20.8 billion rand.

Operating profit in the Oil and Gas and Underground Mining businesses fell as global miners and energy producers continue to preserve capital for new projects.

Reporting by Nqobile Dludla; Editing by Mark Potter - Reuters

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