The Murray & Roberts Group’s global portfolio of projects are now experiencing an increased impact from the spread of COVID-19.
The actions taken globally by governments and clients to contain the spread of the virus, and the company’s response to those actions, has been varied and region specific.
Where projects are continuing to operate, Murray & Roberts has worked with clients to implement measures to safeguard employees as far as possible from exposure to the virus.
Globally, most office-based employees, who are able to do so, are working remotely and efficiently.
Murray & Roberts has several tenders under adjudication, and it has no reason to believe that its clients will not go ahead with the award of these projects.
Some awards, however, may be delayed as clients are considering the effects of COVID-19 on their investment decisions.
As the current complex situation is evolving at a rapid pace, it is not possible at this point to give an accurate estimate of the financial impact that the pandemic will have on the Group.
As the extent of the COVID-19 impact remain uncertain currently, it is important to ensure that Murray & Roberts maintains a position of adequate liquidity, also taking into consideration that the lockdown in
South Africa might be extended and that more stringent regulations might be implemented in any of the Group’s operations in Australasia and the Americas.
The Group entered this period of uncertainty with a strong balance sheet and has taken further action to protect its financial position.
Cost saving initiatives have been implemented across the Group, together with prudent cash and working capital management.
The current liquidity position of Murray & Roberts is strong, supported by approximately R1,5 billion of available cash and unutilised credit facilities of approximately R1,0 billion.
The Group does not have any covenants on its South African facilities and do not anticipate any breaches of covenants on its international facilities in the short to medium term.
Most of the project sites are shut down for the duration of the 21-day lockdown period that has been instituted by the South African government. Certain of the projects are on care and maintenance and limited essential work, as directed by clients.
Some clients have indicated that the Group’s costs will be covered during this period. Projects in Zambia continue uninterrupted.
In Sub-Saharan Africa most power and water project sites are shut down for the duration of the 21-day lockdown period that has been instituted by the South African government.
Maintenance and outage work are continuing at Medupi and Kusile power stations. Some projects have invoked force majeure clauses and commercial teams will respond accordingly in line with contractual requirements.
Some clients have indicated that costs will be covered during this period.
The Gautrain is not operating during the lockdown period. The system’s infrastructure has been secured while essential maintenance functions are continuing.
It is expected that this shutdown will impact the fair value adjustment of the investment in the Bombela Concession Company in the current year.