Construction fortunes lie abroad

Johannesburg - Construction group Murray & Roberts has announced it is targeting R80bn worth of new projects, mainly offshore.

Speaking at the group's annual general meeting on Wednesday, CEO Brian Bruce said: "We're seeing opportunities, but more so in international markets than domestically."

Bruce said renewed confidence in commodities - as evidenced by an oil price of more than $70 a barrel and gold at over $1 000/oz - is fuelling business activities in the mining sector, which will benefit the group's cementation business.

"Resource groups are cautiously introducing capital expenditure plans internationally," he said.

However, Bruce warned that although the recovery of key commodities has brought some stability to Murray & Robert's international operations, rand strength will have a negative effect on these earnings.

He further warned that the group's earnings will be hit by a longer-than-expected slowdown of business activities in South Africa.

"The local economy is expected to take longer than previously forecast to emerge from the effects of recession," Bruce said.

"There is currently little private sector involvement in the South African market, which has a negative impact on the short- to medium-term outlook for domestic mining and industrial and commercial project opportunities."

However, public infrastructure projects are continuing to offer business opportunities in South Africa.

Murray & Roberts' order book at end-September stood at R40bn, while its project opportunity pipeline - plans which the group has identified as targets for future revenues - increased by R42bn to R80bn in the quarter.

- Fin24.com