Construction and mining group Murray & Roberts [JSE: MUR] saw a strong rise in its order book for oil and gas projects, with its share price jumping 8% following the release of its interim results.
Revenue from continuing operations increased by 11% to R10.8 billion, but its diluted continuing headline earnings per share fell by 4%.
Its order book increased by 60% to R50.8 billion, supported by a significant increase (from R4.4 billion to R30.6 billion) in work for the oil and gas sector. This was mainly due to the award of the multi-year Snowy Hydro project in Australia and the Next Wave petrochemical project in the US..
“The strong order book is expected to support growth as from FY2021 as the Oil & Gas platform has now secured a base load of work for the new financial year, which should enable it to again become a meaningful contributor towards Group earnings in the medium term. The Underground Mining platform is expected in the short term, to at least maintain earnings at current levels,” M&R said.
It added that there is significant opportunity for new gas projects in Papua New Guinea, although “material” revenue from these opportunities is unlikely to arise within the next financial year due to the prevailing political uncertainty.
The company warned that the coronavirus is affecting the progress of certain projects in Australia and Asia, due to delays experienced at fabrication yards in China and travel restrictions.
Its share price was last trading at around R10.03 – still 40% below where it was a year ago.
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