Engineering and construction services firm Murray &Roberts in South Africa says its share prices fell by nearly 7% after it predicted a decline in full-year earnings as a result of unstable global economy and hard trading conditions in the country.
Chief executive officer of Murray &Roberts Henry Laas, announced that despite difficult trading conditions, he was confident the firm will continue to implement its strategic plans for the future.
That shares have dropped for Murray &Roberts confirms the fears raised by the construction firms in South Africa at the end of the month over poor market demand for construction and engineering products. During a Macquarie Group CEO construction conference in the capital Johannesburg, the firms disclosed their restructuring plan to cope up with prevailing condition in the country.
During its presentation, Murray &Roberts announced that it was diversifying to become an international engineering and construction group as part of its 2020 strategic plan.
On its part, celebrated construction firm in South Africa WBHO said that it did not expect major changes in 2016/2017. WBHO noted that South Africa’s electricity crisis was creating further opportunities in the energy sector for construction firms. The firm also observed that Africa still had opportunities for construction works. However, the firm lamented low mining opportunities in Africa.
The latest development comes after the Department of Labour in South Africa said last week that it would begin a formal inquiry into the Grayston bridge collapse in Sandton after preliminary probe revealed there was something that caused the collapse.
Murray & Roberts was involved in the construction of the bridge. The engineering and construction firm Murray &Roberts in South Africa included a message of condolence over the deaths in its business update.
“On behalf of the board of directors of Murray & Roberts, we would like to once again reiterate our heartfelt condolences to the bereaved and offer sincere sympathy to those injured,” said the engineering and construction firm in South Africa.
The firm said that it had no information on the causes of the Grayston bridge collapse in Sandton adding that they didn’t intend to speculate on the issue.
The group reconfirmed that its financial performance had been slipping. The update said for the year to June, revenue from continuing operations was R30.6bn, well down from R36bn a year earlier.
“It is expected that the net cash position will decline further, primarily due to an increase in working capital,” the construction company said.
Strategic priorities for the group include resolving historical claims around Gautrain tunnel water ingress and a contract to build a concourse at Dubai international airport.
