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Johannesburg - Construction group Murray & Roberts said on Wednesday it is expected that revenue and operating profit for the first half-year to end December 2009 will be 10% to 20% lower than the previous comparable period.
Diluted headline earnings per share and diluted earnings per share will be between 15% and 20% lower than the previous comparable period.
The company said in a trading statement that since its AGM in October there has been little change in market conditions overall, the group's international operations are experiencing more robust market activity than is evident in South Africa.
It said the primary contributors to this performance profile are the strength of the Rand against the US Dollar and other currencies which translates international performance at a lower level compared to the previous first half-year, performance weakness in the Engineering SADC cluster due primarily to reduced Southern Africa industrial and mining activity and delays to the Eskom power program, and no further profit recognition in respect of the Gautrain Project.
It added there were also difficult trading conditions in the steel reinforcing sector and higher finance charges due to the funding of increased working capital.
The group said its project order book remains stable and stood at R42bn at end October 2009, supported by a domestic and international project pipeline that is showing early signs of growth, particularly in the group's international markets.
There is a strong indication, however, that the work secured by the Group at Kusile Power Station will be delayed, while the start of mechanical erection at the Medupi Project is now delayed by almost a year.
Murray & Roberts has supported the decision by Bombela to offer a modified specification for phase 1 completion of the Gautrain Project in time for the 2010 Fifa Soccer World Cup.
This will require a significant effort from all parties involved in the project to overcome the remaining delays caused by the late transfer of land, dolomite rectification works in the Centurion area and funding constraints still subject to extended dispute resolution processes.
Murray & Roberts will publish its financial results for the first half-year on 24 February 2010, including a prospects statement for the full year to 30 June 2010.
- I-Net Bridge