Murray & Roberts Holdings' share price plunged 22.17% to R1.79 yesterday on the JSE after it warned of lower interim earnings, the descoping of a major contract and plans to dispose of assets to improve liquidity.
It said yesterday in a trading statement its headline earnings a share were expected to fall by at least 20% in the six months to December 31 due to losses at OptiPower and the descoping of its contract at De Beers' Venetia diamond mine.
The group had significantly reduced debt during the year and had been conducting its business in South Africa with constrained working capital facilities for an extended period, "which is unsustainable... it is important for the group to find a solution for its constrained liquidity position, and negotiations in this regard are progressing," the international construction and engineering group said.
It said there was, however, sufficient opportunity in the global mining sector for the group's core mining businesses to do well into the future, and it was positioned for substantial new work in relation to the copper mines in Zambia, which could replace part of the lost Venetia contract revenue.
However, the timing of this work was such that it would not have much of an impact on the 2025 financial year results.
In its past financial year, the group transitioned from a net debt position to a net cash position at the year end, and it reduced its attributable loss significantly to R138 million from R3.18 billion. The group's order book also expanded.
The business platform operating model was discontinued as it was no longer appropriate in a truncated group, removing a layer of executive management and associated costs. The redesigned structure incorporated four operating companies, each under the leadership of a managing director reporting directly to the group CEO.
The board further resolved to start a process of disposing of non-core assets to meet the group's obligations to its banking consortium and restore liquidity to the group.
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