Engineering group Murray & Roberts (M&R), which sold its Southern African infrastructure and building units to a Southern Palace-led consortium in November, has warned that its earnings will fall by more than expected in 2017, owing to additional costs associated with four remaining building projects in the Middle East.
After the Middle East business was excluded from the November disposal, the company’s board decided on an exit strategy. However, in a trading statement issued on Thursday, M&R reported that the closure would be “very costly”, owing to increased costs associated with the projects, as well as an unfavourable arbitration ruling on a project completed in 2011.
Construction activity on all the outstanding projects should be completed by the end of 2017.
In addition, the JSE-listed group’s results for the year to June 30 had been negatively affected by persistently “low energy prices and difficult trading conditions”.
M&R warned that earnings would, therefore, be more than 20% lower than those reported for the 2016 financial year.
The company is due to release its results on August 23.
