Murray & Roberts returns to profitability

Engineering and construction multinational, Murray & Roberts, has announced a significant improvement in its annual results, returning to profitability despite the challenges brought about by the COVID-19 pandemic. The CEO, Henry Laas, joined CNBC Africa to discuss the company's performance in the past financial year. Laas highlighted that the first six months of the year were heavily impacted by the pandemic, continuing the challenges faced in the previous reporting period. However, a strong recovery in the last six months enabled the company to report a profit of 540 million, compared to a loss of 17 million in the previous year. The positive turnaround was attributed to the lesser disruption in operations caused by COVID-19 compared to the previous reporting period. While the energy resources and infrastructure business in Australia performed exceptionally well, the mining business saw a slight reduction in profitability due to challenges in the Americas. The African operation faced losses, primarily in the power, industrial, and water platform, reflecting the lack of investment and opportunities in the market. Despite these setbacks, Murray & Roberts remains optimistic about the future, especially with potential opportunities in government infrastructure projects, particularly in renewable energy. The company's order book also showed promising growth, reaching 60.7 billion rand, with more than 80% of the secured projects being offshore. Laas emphasized that the order book reflects a record high for the company, with a significant portion already committed for the next financial year, indicating a positive revenue outlook. Looking ahead, Laas acknowledged the shifting focus of the company towards international markets due to the limited opportunities in South Africa. He highlighted the company's strategy of seeking growth abroad, a move that has proven successful in recent years with a consistent increase in the order book. While operating profit margins dipped below expectations during the pandemic, the company anticipates a rebound in the coming years. The future prospects for Murray & Roberts signal a stronger emphasis on international business platforms, with an expectation that most revenue will be derived from these regions and sectors. The company's efforts to streamline operations by exiting certain markets, such as the Middle East, aim to bring more predictability and consistency to its financial results. As Murray & Roberts continues to navigate the challenges posed by the pandemic and shifts its focus towards international growth, the company remains optimistic about its outlook and is poised for a successful trajectory in the coming years.