Underground mining to drive 20% uptick in M&R’s interim earnings

JSE-listed Murray & Roberts (M&R) expects to have achieved at least a 20% year-on-year improvement in its diluted and basic earnings a share and headline earnings a share for the six months to December 31.The uptick in results is attributed to its underground mining division, which is expected to report an increase in earnings compared with the previous interim reporting period, as it continues to deliver strong results across all three main geographic regions – Australasia, Africa and the Americas.Based on market research guidance, the group expects a sustained improvement in commodity prices and subsequent increase in capital spending by mining companies to represent long-term upside for this business.

Tendering departments are currently experiencing a very high level of activity, it said.The company further noted that efforts were under way to replenish the power and water platform’s order book, both in South Africa and the rest of sub-Saharan Africa, with a particular focus on prospects in complementary markets such as mining, pulp and paper, chemicals and energy.Its oil and gas business  is expected to maintain its financial performance in line with the previous reporting period, within the context of a market presenting limited opportunity considering low levels of investment by energy producers.

However, the stabilisation of the crude oil price to around $70/bl and the general improvement in the market outlook for liquefied natural gas demand, would bolster M&R’s results in future.The company expects improved trading conditions in the medium term, when investment by global energy producers is expected to return, supported by increasing demand from China and Japan.”Progress is being made with the potential acquisition of a small oil and gasengineering and constructionproject implementer in the US,” the group noted.