Engineering company Murray & Roberts' (M&R’s) global portfolio of projects experienced a significant Covid-19 profit impact during the 2020 financial year and, as a result, the company expects to report a headline loss a share of between 74c and 86c.

Its basic loss a share is anticipated to be between 83c and 95c a share.

In response to the pandemic, a few of M&R’s projects continued with little or no disruption, while others were suspended or placed on care and maintenance.

Globally, most office-based employees currently continue to work remotely, while the majority of the group’s projects have resumed operations.

In a statement on August 19, the group said it had entered the Covid-19 characterised period of disruption and uncertainty “with a strong balance sheet” and that it took early and proactive action to preserve its financial position.

Prudent cash and working capital management initiatives were implemented across the group, and so far, no clients have defaulted on payments owing to the pandemic.

In terms of overall financial performance and prior to the impact of Covid-19, the group was tracking well to meet its guidance of an improved performance in the 2020 financial year.

However, the direct profit impact of the pandemic on projects during the year is currently estimated at R622-million. The negative impact of this, combined with the impairment of an R80-million vendor loan relating to the sale of Genrec, now in business rescue; the R63-million impairment relating to goodwill on two group companies owing to market uncertainty; and the R46-million impairment of uncertified revenue on a claim, “created a perfect storm” for the group.

M&R has an order book of R54.2-billion and near orders of R11.4-billion, which underscores the board’s confidence in the group’s strategy.

The project opportunity pipeline includes a significant value of near orders, with opportunities including four projects under negotiation on a sole-source basis. These have a combined value of about R40-billion.

In the year ahead, the focus will be on at least maintaining the order book at current levels, if not growing the order book; improving project execution; reducing working capital; progressing digitalisation; and exiting the Middle East, which the M&R board believes will support a return to profitability in the 2021 financial year and a path to earnings growth beyond.