Specialist engineering and construction group Murray & Roberts (M&R) in a statement on Friday said it was still too early to provide an estimate of what the effect of Covid-19 would be on the company’s earnings for the current financial year.
As it stands, the impact on its active projects in Australasia, the Americas and sub-Saharan Africa had been limited, M&R confirmed.
The company has not received any indication of potential project cancellations, it said.
It had, however, earlier this month, reported that it was struggling to secure the services of specialist Thai welders for a contract at forestry group Sappi’s KwaZulu-Natal operations and that a shaft-sinking project in Mongolia had experienced equipment supply and workforce disruptions as a result of Covid-19 and measures implemented to try to contain the spread of the coronavirus.
Meanwhile, M&R said its strong order book of R50-billion as at December 31 would provide support for growth from the 2021 financial year.
The company noted that its oil and gas platform had already secured a lot of work for the new financial year, which should enable it to again become a meaningful contributor towards group earnings.
M&R was not involved in oil projects at the moment, so it was unaffected by the current weak oil price, but advised that it might be impacted on in the medium term. It was possible that the weak oil price may delay investment in gas projects that M&R had been tracking in its project pipeline.
The company had two significant oil and gas sector projects in the order book, including Next Wave, a greenfield ethylene-to-alkylate production facility in the US. The project is fully funded and has a completion date of two years’ time. M&R said it was unlikely that the oil price would impact on this project.
Additionally, the company’s Ichthys project, in Australia, was in the process of being commissioned and would, therefore, not be cancelled owing to a weak oil price.
“There are several gas sector projects that the group has tendered and these tenders, which currently are under adjudication, are for gas-fired power stations in Australasia. The low oil or gas price will only improve the viability of these projects and the group remains confident to secure some of these projects in the short term,” said M&R.
The underground mining platform is expected to maintain earnings at stable levels in the short term.
The company is optimistic about the longer-term outlook for natural resources markets.