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Home Company Reviews Murray & Roberts eyes a $64.2billion project pipeline

Murray & Roberts eyes a $64.2billion project pipeline

Murray & Roberts construction group is eyeing a $64.2billion project pipeline that is set to be rolled out soon in South Africa. There is however some uncertainty around the timing of the potential opportunities.

The JSE-Listed group has recently posted higher earnings in its financial performance during the six months to December 31. The company had identified and targeted projects to the value of $3.6billion, a significant rise on the $6.6billion identified in the corresponding period the year before.

M&R, CEO Henry Laas in a past statement said that despite the impressive improvement, the next 12 to 24 months would remain tough as commodity prices continued to fall.

The oil and gas sector accounted for about $17.7billion of the $23.7billion in potential opportunities that M&R had tracked and expected to come to the market in the next two years.

The group was working on a budget of about $7.1billion, feasibility studies and prequalification. Infrastructure, power and water accounted for just under $2.6billion each in this category.

Meanwhile, work on tenders for some $5billion to 1.9billion continued in the oil and gas sector and R26-billion in mining.

In addition, tenders worth $798.2million where M&R was the preferred bidder and final award was subject to financial close by the end of December.

Laas pointed out that by January; $160.9million of the bids had been transferred into the order book.
At the end of December, M&R’s order book stood at $2.6 billion an increase of 7 per cent on the $2.4 billion recorded in the prior corresponding period.

As mining companies moved to maintain their ongoing infrastructure replacement spend, the underground mining division secured $1billion into the current order book, a sharp increase from $888.3million in the prior first-half.
The infrastructure and building business also reported an increase in the order book from $412million in the six months to December 2014 to $476.5million.

According to Laas, the building market was showing a steady slow down, while the roads business had secured some work. He said the building division was now pursuing project development to reduce the risk of low margins in a soft construction market.

Meanwhile, in the oil and gas unit, the order book posted a decline from $785.6million in the first half of 2014 to $586million in the first half of the current financial year, with the sustained weakness in the oil price slowing down the implementation and ramp-up of projects and resulting in the deferral of projects and increased pressure on margins.

The power and water unit posted an order book of $495.8million during the six months to December 31, up from $347.7million in the corresponding period the year before. About 91 per cent related to the power sector, as the unit continued to struggle to secure meaningful projects.

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