Further to the cautionary announcement published on the Stock Exchange News Service of the JSE on 20 July 2016, relating to the potential disposal of non-strategic assets, the Group has decided to dispose of its Infrastructure & Building businesses and Genrec business. Negotiations with prospective buyers are at an advanced stage and shareholders are advised to continue exercising caution when dealing in the Company’s securities, until a full announcement is made.


The decision to dispose of the Infrastructure & Building businesses, supports the Group’s long-term strategy to focus its business on the global natural resources markets, and follows an extended period of careful planning and consideration. The proposed transaction is in the best interests of the long-term sustainability of both the Group and the Infrastructure & Building businesses. This transaction excludes the Group’s investment in the Bombela Concession Company (“BCC”), Bombela Civil Joint Venture (“BCJV”) and Bombela Operating Company, as well as the operations in the Middle East, where current projects are expected to be completed by December 2017 and no new projects are being pursued. The board of directors of Murray & Roberts (“Board”) has also decided to dispose of Genrec, the only remaining manufacturing business in its portfolio of businesses.


The Group continues to implement its New Strategic Future plan and the three multinational business platforms provide a strong base for future growth.

The three key strategic drivers are: global economic growth, global population growth, and continued urbanisation, which will provide the basis for sustainable growth in natural resources markets over the long term.

It is the Group’s vision, by 2025, to be a leading multinational group that applies its project lifecycle capabilities to optimise fixed capital investment. The Group will achieve this by focusing its expertise and capacity on selected oil & gas, metals & minerals and power & water market sectors.

Growing its capability in specialist engineering, commissioning and asset support & maintenance services in these market sectors, should yield higher margins and carry lower risk than services only provided in the construction segment of the project value chain. This diversification is aimed at enhancing return to shareholders.


    20121 20131 20141 20151 2016  
  Total attributable earnings (Rm) (736) 1 004 1 261 881 753  
  Continuing attributable earnings (Rm) (970) 976 801 810 877  
  Discontinued attributable earnings (Rm) 234 28 460 71 (124)  
Diluted continuing HEPS (290) 192 194 195 175  
1 Restated for discontinued operations.  


FY2016 has been a difficult year in pursuit of the Group’s New Strategic Future plan. Murray & Roberts is largely exposed to the global natural resources sector and is continuing to steer its way through challenging trading conditions, especially in the oil & gas sector.

The weakness of the oil price and its resulting global ripple effect has had a significant impact on the Group’s earnings. The resilient performance in the Underground Mining platform, albeit counter-cyclical, was not enough to stem the declining earnings momentum, primarily driven by the downward trend in contribution from the Oil & Gas platform.

Against this backdrop, the Group is constantly reviewing and adjusting its cost structures to support profitability, in markets which are likely to remain tough for at least the next 18 months. In addition, the Group’s focus on improving commercial and project management in the past few years, has continued to reduce the number of distressed projects.

The Infrastructure & Building and Genrec businesses have been classified as discontinued operations, and results for FY2015 have accordingly been restated. The Group recorded revenue from continuing operations of R26,1 billion (June 2015: R24 billion) and attributable earnings of R753 million (June 2015: R881 million). Diluted continuing headline earnings per share decreased to 175 cents (June 2015: 195 cents). The net cash position at 30 June 2016 increased to R1,8 billion (June 2015: R1,4 billion).

The Group order book was R33,4 billion (June 2015: R38,3 billion). The order book for continuing operations was lower at R28,7 billion (June 2015: R33,3 billion), primarily due to a reduced order book for the Underground Mining platform in Africa, and the Oil & Gas platform reflecting a lower order book due to the depressed market.

Capital expenditure for the year was R431 million (June 2015: R425 million) of which R332 million (June 2015: R290 million) was for expansion and R99 million (June 2015: R135 million) for replacement. The Underground Mining platform incurred the bulk of the capital expenditure.


The Group’s order book and project pipeline is outlined below.

R billions Order
Oil & Gas 6,4 0,7 20,8 23,9 396,9  
Underground Mining 14,2 7,6 9,8 18,4 39,9  
Power & Water 6,7 0,3 0,8 18,0 12,1  
Middle East and Bombela 1,4  
Continuing Operations Totals 28,7 8,6 31,4 60,3 448,9  
Discontinued Operations Totals 4,7 2,0 8,6 40,9 56,6  
30 June 2016 – Group Totals 33,4 10,6 40,0 101,2 505,5  
30 June 2015 – Group Totals 38,3 7,9 75,3 93,7 247,6  
  • Near Orders – Tenders where the Group is the preferred bidder and final award is subject to financial/commercial close. There is more than a 95% chance that these orders will be secured.
  • Category 1 – Tenders the Group is currently working on (excluding Near Orders). Projects developed by clients to the stage where firm bids are being obtained. Chance of being secured as firm orders is a function of final client approval as well as bid strike rate.
  • Category 2 – Budgets, feasibilities and prequalification the Group is currently working on. Project planning underway, not at a stage yet where projects are ready for tender
  • Category 3 – Opportunities which are being tracked and are expected to come to the market in the next 36 months. Identified opportunities that are likely to be implemented, but still in prefeasibility stage.



                      OIL & GAS                      
R millions Engineering   Construction
& Fabrication
Global Marine Com-
and Other
June 2016   2015   2016   2015   2016   2015   2016   2015   2016   2015   2016   2015  
Revenue 2 707   4 679   126   705   936   2 085   6 977   3 384   466   953   11 212   11 806  
Operating profit/                                                
(loss) 329   666   (13)   103   (4)   51   735   389   (522)   (371)   525   838  
Margin (%) 12%   14%   (10%)   15%   0%   2%   11%   11%       5%   7%  
Order Book 1 574   4 405   1 208     341   832   3 306   3 209       6 429   8 446  
Segment assets                                         2 919   3 675  
Segment liabilities                                         2 072   2 808  
People                                         1 464   2 495  
LTIFR (Fatalities)                                             0.24(0)  

Financial Performance: The most material factor affecting the Group’s profitability has been the substantial decline in the Oil & Gas platform’s earnings following the significant drop in the oil price during the second half of calendar year 2014. Few new international capital project opportunities came to market, as global energy producers delayed or cancelled major Greenfields projects and deferred Brownfields expenditure to preserve cash. Business optimisation initiatives already effected, will reduce platform overhead costs by A$40 million per annum. Revenue reduced to R11,2 billion (June 2015: R11,8 billion) and operating profit to R525 million (June 2015: R838 million). The order book decreased to R6,4 billion (June 2015: R8,4 billion).

Operational Performance and Outlook: Major construction work was completed on several projects in Australia, including the first LNG train on the Gorgon LNG Project and the jetty for the Chevron-operated Wheatstone LNG project.

Subsidiary company e2o continued to perform commissioning work on the Gorgon and Wheatstone LNG projects. As these projects move into their operational phases, e2o will provide on-going operational support.

The Clough-AMEC joint-venture undertook work on the ConocoPhillips Bayu-Undan contract, successfully completing scheduled maintenance work during the year. Clough continued to provide Brownfield services to support Chevron and Eni’s Australian operations, which present opportunities for future project work.

The US subsidiary CH-IV International, acquired during FY2015, continued to grow in line with expectations off a low base, securing a number of small but key contracts with Eagle LNG, National Grid and Freeport, providing specialist front-end engineering and regulatory support services. Engineering firm Booth Welsh, also acquired during FY2015, continued to develop specialist electrical, control and instrumentation products and services, securing extensions of several framework agreements in the UK with blue chip clients such as GlaxoSmithKline, EDF Energy, Scotia Gas Networks and DSM.

The platform is facing a challenging short to medium term future and prospects will only improve when oil companies again start to invest in new projects. The market has contracted substantially and competition is fierce. The platform needs to optimise results from current projects and maximise opportunity from the emerging commissioning and Brownfields and asset support market on LNG facilities in Australasia and opportunities in new markets such as the USA and Southeast Asia. In addition, re-engagement of the historic Clough infrastructure delivery capability in the domestic market, will provide opportunity in a market that is currently investing in Australia.


R millions Africa   Australasia   The Americas   Total  
June 2016   2015   2016   2015   2016   2015   2016   2015  
Revenue 3 640   3 770   1 392   830   3 756   2 965   8 788   7 565  
Operating profit/(loss) 86   117   125   61   295   233   506   411  
Margin (%) 2%   3%   9%   7%   8%   8%   6%   5%  
Order Book 9 731   11 877   1 924   1 812   2 603   3 058   14 258   16 747  
Segment assets 955   1 170   809   620   1 867   1 613   3 631   3 403  
Segment liabilities 944   1 064   205   119   724   596   1 873   1 779  
People 5 407   5 745   919   659   1 048   1 168   7 374   7 572  
LTIFR (Fatalities) 2.39(1)   2.25(2)   0.51(0)   0.0(0)   2.08(0)   1.67(1)   2.11(1)   2.00(3)  

Financial Performance: Considering the impact of weak commodity prices, the platform recorded a resilient financial performance. Mining companies continued to preserve capital, which limited the number of project opportunities associated with new mines. However, the platform’s success in securing projects associated with mining companies’ ongoing infrastructure replacement and development spend to sustain their operations, once again contributed to an improved performance in the year, despite the challenging market conditions.

Revenues increased to R8,8 billion (June 2015: R7,6 billion) and operating profit increased to R506 million (June 2015: R411 million). The order book declined to R14,2 billion (June 2015: R16,8 billion).

Operational Performance and Outlook: Murray & Roberts Cementation progressed its Africa strategy through its office in Zambia, completing the shaft sinking and equipping at Mopani Copper’s Synclinorium mine and making good progress on the shaft sinking and mine development at their Mufulira mine. In South Africa, De Beers’ Venetia Mine and Northam Platinum’s Booysendal Mine were affected by community unrest in their respective areas, which impacted productivity. Both projects offer significant long-term opportunities, and initiatives are underway to improve performance on both projects.

Market conditions in Australia improved, particularly in the gold mining sector and for large-diameter raise boring work. Positive developments included further increases in the scope of work at the Freeport project in Indonesia. Key raise boring work secured included projects at Newmont Mining’s Callie mine, Sandfire’s Degrussa mine and Western Areas’ Spotted Quoll mine, as well as at the Freeport and Karari mines.

Cementation Canada posted robust returns driven by good performances from Compass Minerals’ Goderich shaft rehabilitation and Rio Tinto’s Diavik contract mining projects amongst others. It was also awarded a contract to develop Pretium Resources’ Brucejack gold mine in Northern British Columbia. Cementation USA continued to perform well at Lundin’s Eagle mine and Rio Tinto’s Kennecott mine where the platform’s “life-of-mine” strategy is proving successful.

It is anticipated that market conditions will improve in the medium term as the commodity cycle bottoms out and demand and prices increase. There is a large investment pipeline of new underground projects in regions where the platform has a presence, while mining companies’ ongoing infrastructure replacement spend to sustain their operations will continue to present opportunities. With its global footprint, and the ability to pool and leverage its resources, the platform is well placed to win and execute work for its clients when market conditions improve.


R millions Power
  Other3   Total  
June 2016   20151   2016   20151   2016   20151  
Revenue 3 600   2 827   676   790   4 276   3 617  
Operating profit/(loss) 216   170   (189)   (322)   27   (152)  
Margin (%) 6%   6%   (28%)   (41%)   1%   (4%)  
Order Book 5 892   5 194   791   804   6 683   5 998  
Segment assets 1 146   845   556   1 019   1 702   1 864  
Segment liabilities 886   719   460   469   1 346   1 188  
People 5 282   4 995   565   1 279   5 847   6 274  
LTIFR (Fatalities) 0.70(0)   0.41(0)   0.70(0)   0.23(0)   0.70(0)   0.35(0)  
1 Restated for discontinued operations.
2 Power programme contracts.
3 Includes Power & Water non-power programme projects

Financial Performance: The platform underwent extensive restructuring in the final quarter of FY2015, following substantial losses that were recorded on several projects.

Revenues increased to R4,3 billion (June 2015: R3,6 billion) and an operating profit of R27 million (June 2015: R152 million operating loss) was recorded, despite significant write-offs on legacy projects amounting to R230 million. This includes impairment of R155 million of previously declared revenue and further project close-out costs of R75 million in the current year. The order book increased marginally to R6,7 billion (June 2015: R6 billion).

Operational Performance and Outlook: During the year, boiler construction at the Medupi and Kusile power stations continued in terms of the contract with Mitsubishi Hitachi Power Systems Africa. At Medupi, Unit 6 has been synchronised and is in commercial use; Unit 5 first fired on oil during June 2016, a significant milestone; and Unit 4 has been hydro tested. At Kusile, after successful hydro testing, the chemical cleaning process on Unit 1 is in preparation, to be followed by hydro tests on Unit 2.

In line with its stated objective to provide repair, operations and maintenance services to the power sector, the platform secured work as a subcontractor to Korean EPC Doosan Heavy Industries on the Morupule A project in Botswana. This project provides an important entry into the Botswana power sector, potentially presenting Brownfield, as well as Greenfield opportunities. Of note was the platform’s success in being appointed as preferred bidder for one of only two biomass power generation projects under the Small Projects Renewable Energy programme by the South African Department of Energy. Obtaining preferred bidder status on the George Biomass project was an important achievement, as it comprises full project life cycle participation, including equity participation as a developer for Murray & Roberts Limited.

Aquamarine Water Treatment increased its revenue in FY2016 and continues to grow its sales network into Africa. Murray & Roberts Water has recently secured access to a unique wastewater treatment technology, via a licensing arrangement with Organica from Hungary, a global provider of innovative solutions for the treatment and recycling of wastewater. This technology provides a differentiated offering with advantages over traditional technologies, with various municipalities and water authorities across South Africa already showing immediate interest.

Further inroads were made into sub-Saharan Africa by leveraging the Murray & Roberts brand and through successful project delivery. In Ghana, a small project for Subsea 7 in the port of Takoradi was completed and at the same location, a fuel storage tank project for GOIL is underway, to be completed early in calendar year 2017. A number of new prospects have been identified at the Takoradi port that will provide new opportunities.

The prospects for power projects continue to improve, especially in South Africa. Opportunities in the Renewable Energy Independent Power Producer Procurement Programme sector are being targeted and the platform is well positioned to secure work in the coal, solar and future gas-to-power sectors. The platform has identified a substantial project pipeline of opportunities in sub-Saharan Africa, both in the near and medium term. Opportunity remains strong, but the market is very competitive as more companies target this market.

The platform continues to deliver existing and develop new projects in complementary markets. The oil and gas division of Murray & Roberts Power & Energy has been engaged with Sasol Group Technology on several projects and shutdown type work in Secunda and Sasolburg during the year. The electrical and instrumentation division of Murray & Roberts Power & Energy are executing projects in South Africa and Namibia with further real opportunities in the short to medium term for this business.

(retained, post the discontinuation of the Infrastructure & Building Southern African construction businesses)

R millions Bombela Investments   Middle East   Total  
June 2016   20151   2016   2015   2016   20151  
Revenue 169   85   1 703   940   1 872   1 025  
Operating profit/(loss) 74   121   (68)   28   6   149  
Margin (%) 44%   142%   (4%)   3%   0%   15%  
Order Book 42   4 874   1 331   2 216   1 373   7 090  
Segment assets 3 379   2 866   2 075   2 669   5 454   5 535  
Segment liabilities 2 376   2 458   1 819   2 411   4 195   4 869  
People 11 205   6 547   7 870   6 552   19 075   13 099  
LTIFR (Fatalities) 0.0(0)   0.0(0)   0.07(0)   0.06(0)   0.07(0)   0.06(0)  
1 Restated for discontinued operations.

Financial Performance: A profit of R6,0 million (FY2015: R149 million) was recorded. The Middle East recorded a loss of R68 million (FY2015: profit R28 million) due to weaker operational performance and legal costs on the Dubai International Airport claim. The Bombela entities include the BCJV, which recorded a loss of R71 million (FY2015: loss R39 million), primarily reflecting the ongoing legal cost on the Gautrain claims arbitrations, and the BCC investment, which recorded a fair value adjustment of R156 million (FY2015: R172 million).

Operational Performance and Outlook: Following the proposed disposal of the Infrastructure & Building businesses, the operations in the Middle East will be limited to the completion of four projects currently under construction, close-out of subcontractors on completed projects and the Dubai International Airport claim.


R millions Tolcon and
  I & B
June 2016   2015   2016   2015   2016   2015   2016   2015   2016   2015  
Revenue 9   85   1   3   4 360   5 934   288   621   4 658   6 643  
Operating profit/(loss) 11   23   (28)   (4)   7   43   (108)   18   (118)   80  
1 Restated for discontinued operations.
4 Includes Tolcon, Construction Products Africa and Steel Reinforcing Products.

Discontinued operations comprise the Infrastructure & Building businesses, Genrec and Clough Properties.

Infrastructure & Building Southern African construction businesses: In a weak domestic market, the Southern Africa construction operations achieved an operational profit of R68 million (FY2015: R56 million).

Genrec: Genrec incurred a loss of R108 million (FY2015: profit R18 million). The loss is attributable to an impairment of property, plant and equipment, and operating losses.


The Board deeply regrets the death of three employees who sustained fatal injuries whilst on duty. Emmanuel Mupanda (26), a flagman employed by Murray & Roberts Infrastructure, was fatally struck by a public vehicle whilst conducting his duties in an enclosed section of the Bela-Bela Polokwane road and Mike Mwenda (33), an employee of Murray & Roberts Cementation Zambia, who worked as a rock drill operator at the Mufulira Copper Mine project, sustained fatal injuries in a fall-of-ground incident. Subsequent to year-end, Ditebogo Phuduhudu (27), a Murray & Roberts Plant employee, sustained fatal injuries whilst on duty. A comprehensive investigation is underway to determine the causes and learnings from this incident.

The Group’s overall lost time injury frequency rate reduced to a record-low level of 0.68 (June 2015: 0.79). The Group is implementing a Major Accident Prevention programme, focussed on the implementation and verification of critical controls on high-risk activities that may give rise to major accidents and fatalitie


As at the end of June 2016, the Group’s uncertified revenue, primarily represented by the Group’s major claims on Gautrain and Dubai International Airport, totalled R2 billion. These claims are diligently pursued and stakeholders will be kept informed as to their progress.

Gautrain Sandton Cavern Claim – Following the favourable arbitration ruling in favour of BCC of R624 million, for which no previous value was recognised as uncertified revenue, the Gautrain Management Agency served a motion in the High Court taking this award on review.

Gautrain Water Ingress Dispute – In November 2013, in the dispute between Gauteng Province (“Province”) and BCC, the arbitration panel ruled in favour of Province. The arbitration ruling was confirmed in the High Court and BCC lodged a motion for leave to appeal. The Company raised a provision of about R300 million in the prior financial years for its share of potential construction costs to be incurred by the BCJV. The extent of any other potential financial impact related to the matter is yet to be determined.

Gautrain Delay & Disruption Claim – Due to the complexity of this multi-billion rand claim, the initial arbitration hearings were focused on addressing the legal interpretation of various clauses in the Gautrain concession agreement. BCJV is claiming from Province for additional costs incurred following a design change to the bridges over John Vorster and Jean Avenue in Centurion. This claim, on its merits, was ruled in favour of BCJV on 4 May 2016, with quantum to be determined in October 2016. The balance of the Delay & Disruption claim is scheduled to be heard in calendar years 2017 and 2018.

Dubai International Airport – The Dubai Airport City Corporation confirmed that it was the respondent to the claim. Commercial close-out of this matter is expected during the 2017 calendar year. The arbitration hearing is scheduled to commence in April 2017.


On behalf of the Board, we once again express our heartfelt condolences to the bereaved and offer sincere sympathy to those injured.

In November 2015, the Department of Labour (“DoL”) instituted a Section 32 Inquiry (“the Inquiry”) into the incident to gather information relating to the cause or causes of the collapse of the temporary works structure. This is a formal inquiry conducted under the provisions of the Occupational Health and Safety Act, 1993. At the conclusion of the Inquiry, the DoL will submit a written report containing its findings, to the National Prosecuting Authority for its consideration.

Taking into account that the Inquiry is still ongoing, the Group cannot speculate on the cause or causes of the incident at this time.

The direct financial impact of this incident on the Group is not expected to be material.


Suresh Kana, Xolani Mkhwanazi and Keith Spence were appointed to the Board in July, August and November 2015, respectively. These directors bring a wealth of business expertise and international experience to the Board. Michael McMahon retires from the Board with effect from 30 September 2016, and Royden Vice with effect from 30 November 2016, having reached the mandatory retirement age. We convey our thanks to Michael and Royden for their immeasurable contribution to the Group’s development over 12 years.


The Board has declared a gross annual dividend of 45 cents (June 2015: 50 cents) per ordinary share in respect of the year ended 30 June 2016. The dividend will be subject to the dividend tax rate of 15%, which will result in a net dividend of 38.25 cents per share to those shareholders who are not exempt from paying dividend tax. The dividend has been declared from income reserves.

In terms of the Dividends Tax effective 1 April 2012, the following additional information is disclosed:

  • The number of shares in issue at the date of this declaration is 444 736 118 and the Company’s tax reference number is 9000203712.

In order to comply with the requirements of Strate, the relevant details are:

Last day to trade (cum-dividend) Tuesday, 4 October 2016
Shares to commence trading (ex-dividend) Wednesday, 5 October 2016
Record date (date shareholders recorded in books) Friday, 7 October 2016
Payment date Monday, 10 October 2016

No share certificates may be dematerialised or rematerialised between Wednesday, 5 October 2016 and Friday, 7 October 2016, both dates inclusive.

On Monday, 10 October 2016 the dividend will be electronically transferred to the bank accounts of all certificated shareholders where this facility is available. No dividend cheques will be paid to shareholders who have not provided their banking details to the transfer secretaries: Link Market Services. Accordingly, the cash dividend will remain unpaid until such time as the shareholder has provided their relevant banking details to the transfer secretary, to receive the cash dividend by electronic funds transfer. No interest will be paid for unpaid dividends.


It is expected that difficult macro-economic conditions will persist. The Group expects a decline in operational earnings for FY2017, when compared to FY2016, mainly due to the lack of opportunity for the Oil & Gas platform, as the full impact of the oil price collapse and global oversupply is felt in this market.

All platforms will continue to focus on cost reduction and operational excellence to preserve margins. The Group will continue to implement its New Strategic Future plan. The natural resource market sectors are cyclical and the Group will trade through this difficult period whilst implementation of this plan will position the Group well for the upturn.

On behalf of the directors:

Mahlape Sello
Chairman of the Board
Henry Laas
Group Chief Executive
Cobus Bester
Group Financial Director

24 August 2016

^ The Infrastructure & Building platform’s Southern African operations and Genrec were reclassified to discontinued operations and the comparative financial results have been restated.
# The operating performance information disclosed has been extracted from the Group’s operational reporting systems. The Corporate & Properties segment is excluded from the operational analysis. Unless otherwise noted, all comparisons are to the Group’s performance as at and for the year ended 30 June 2015.