The direct profit impact of the pandemic on projects during the year is estimated at R622 million.
Engineering and mining contractor Murray & Roberts has reported significant Covid-19 impact on its profit for the year ended 30 June 2020.
As a result of the measures implemented by the government to limit the spread of the virus, few of its projects were able to continue without disruption, some were suspended and others were placed on care and maintenance.
While the majority of Murray & Roberts’s projects have resumed operations as lockdown and restrictions are lifted, most of its office employees continue to work remotely.
According to a statement, the group entered the Covid-19 period of disruption and uncertainty with a strong balance sheet and took early and proactive action to preserve its financial position. Cash and working capital management initiatives were implemented across the group and no client has defaulted on payments as a result of the pandemic.
In terms of overall financial performance and prior to the impact of Covid-19, the group reported that it was tracking well to meet its guidance of an improved performance in FY2020, relative to the previous reporting period.
The direct profit impact of the pandemic on projects during the year is estimated at R622 million. “This negative impact, combined with the impairment of an R80 million vendor loan relating to the sale of Genrec, now in business rescue, the impairment of R63 million relating to goodwill on two group companies due to market uncertainty, and the impairment of R46 million of uncertified revenue on a claim, created a perfect storm for the group,” the company said. “Execution challenges on a few projects, also disappointed.”
However, the company added that its financial position is robust and sufficient to fund its growth plans and debt is within its targeted range.
Murray & Roberts intends to publish its annual financial results for the year ended 30 June 2020 on 26 August 2020.