Bheki Mpofu
26 November 2008
Johannesburg — MURRAY & Roberts, one of SA's big four construction companies, said yesterday it had delayed or suspended some of its projects as some clients experienced cash-flow problems in the global credit crunch.
The group was restructuring its local and international operations and cutting costs across its businesses. CEO Brian Bruce did not rule out job cuts as part of that cost-cutting exercise, to be completed by year-end.
But the group maintained its earnings forecasts for the full year to June despite the delays and suspensions. It advised investors to be "prudent" in light of the credit squeeze.
"Where markets are negatively affected and demand disappears, we eliminate the costs associated with the operations engaging those markets," Bruce said. "This is standard business practice.
"There have been and may still be retrenchments, but we will clearly do what we can to avoid this, or else try and find alternative opportunity elsewhere in our organisation.
"The economies of the world are all showing distress. This is not because of anything we have done. We are just the recipient and we take the actions we need to protect the company. So we are sharpening our organisational focus to both ensure we are able to secure the work that will still be available and to deliver it efficiently and effectively to our clients."
Murray & Roberts said due to the continued financial crisis, the construction sector had been severely downgraded by the stock market on fears of a recession and depleted future work opportunity.
Until recently the financial crisis had had little effect on construction , especially for companies with heavy exposure to infrastructure investment.
The group warned investors that "the potential impact of current market volatility may manifest itself on the construction sector and group performance in the future".
The group said its substantial project order book, which stood at R60bn in October, provided a solid performance foundation for the period up to 2012 and beyond.
"There are a number of significant public works and other strategic opportunities in the group's domestic and international project pipeline that are likely to proceed and which will provide stability through the difficult times ahead."
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