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M&R Bounces Back with Reduced Losses, Streamlines Operations

Financial Rebound as M&R Tackles Debt, Boosts Market Confidence

by Ikeoluwa Ogungbangbe
M&R Financial Turnaround

Murray & Roberts (M&R), a company listed on the Johannesburg Stock Exchange, has taken a significant stride towards financial recovery, reporting a remarkable reduction in its losses for the six-month period ending December 31, 2023. The engineering and contracting services company revealed an attributable loss of R95-million, a stark improvement from the R2.5-billion loss encountered during the same period in the previous year. This positive shift in financial health was met with approval from the market, evidenced by a notable increase in the company’s share price.

This turnaround is notably attributed to the company’s decisive actions following the challenges it faced, including the loss of control of its Australian holding company, Murray & Roberts Proprietary Limited (MRPL), and its subsidiaries due to voluntary administration. This move was prompted by the adverse impacts of the Covid-19 pandemic, especially on Clough, one of the group’s key subsidiaries.

Post-restructuring, M&R has refocused its operations towards the African and Americas underground mining markets, alongside renewable energy and power infrastructure projects in sub-Saharan Africa. This strategic pivot is reflected in the company’s financial outcomes, with revenue from continuing operations climbing to R6.6-billion from R5.9-billion in the prior year, and earnings before interest and taxes increasing to R103-million. M&R has also demonstrated an impressive ability to secure new business, amassing near orders worth R10.2-billion during the review period. Moreover, the company has made significant headway in reducing its net debt, which now stands at R247-million, down from about R1.9-billion in the previous period.

The company’s deleveraging efforts were further bolstered by the sale of non-strategic assets and renegotiated terms on major projects, culminating in a substantial reduction of its South African debt. Additional support came from Cementation Canada, which renewed its banking facilities agreement, allowing for dividends to be paid to M&R and further alleviating the group’s debt burden. As M&R moves forward with a leaner, more focused structure, it has announced a comprehensive cost review, leading to significant organizational changes. This includes the rationalization of the group’s structure around four key operating companies and the departure of several high-level executives, aligning the company’s resources more closely with its strategic focus areas.

The group’s endeavor to refine its operations and reduce costs is further evidenced by a planned 40% reduction in headcount and office space at its corporate office in Johannesburg. This restructuring underscores M&R’s commitment to streamlining its operations and fortifying its financial position.

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