MURRAY & ROBERTS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1948/029826/06
JSE Share Code: MUR
ADR Code: MURZY
ISIN: ZAE000073441

(“Group” or “Company”)

SEVENTY-FOURTH ANNUAL GENERAL MEETING

The Group released its FY2022 annual financial results on 31 August 2022 and Annual
Integrated Report to stakeholders on 30 September 2022. Full details of the Group’s financial
results and Annual Integrated Report have been published on the website at www.murrob.com.
Stakeholders are also referred to the Cautionary Announcement and Trading Statement which
the Group published on SENS on 17 October 2022.

BUSINESS UPDATE

Operationally, the Group is structured to deliver its projects through three business platforms:
the Mining platform, the Energy, Resources & Infrastructure platform, and the Power, Industrial
& Water platform.

MINING PLATFORM

The Mining platform comprises three regional businesses in Africa, the Americas and
Australasia. The platform is established in most of the world’s key growth areas for metals and
minerals extraction and production.

Within this fast-changing operating environment, the Mining platform’s vision is to be the global
mining services partner of choice, recognised as a responsible, fully diversified service
provider with the best skillset in the industry. To take advantage of these global opportunities
and drive growth, the leadership team identified the need to establish the platform as a single
global organisation, enabling more effective collaboration between the regional entities. The
Mining platform will be reorganized and restructured to drive greater collaboration with
common systems, global metrics, shared resources and centres of excellence.

The price outlook for most major commodities remains strong in the medium term. This is
expected to drive growth in mining investment with an emphasis on brownfields expansion,
production optimisation and restarts. Prices for commodities required for decarbonisation are
expected to escalate further in the medium term as demand increases.

The platform’s order book and near-term project pipeline is strong. The order book increased
to R22,2 billion as at 30 September 2022 (June 2022: R21,9 billion), with the platform recording
near orders of R9,8 billion as at 30 September 2022 (June 2022: R14,9 billion).
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All projects in the Mining platform are progressing according to expectations.

ENERGY, RESOURCES & INFRASTRUCTURE (“ERI”) PLATFORM

The Group published a Cautionary Announcement on 17 October 2022 to alert shareholders
and the market to the impact of ongoing disruption in supply chain delivery and delays in project
milestone payments on several projects, which has had a material impact on project profit
margins and pressure on working capital requirements. The pressure on the Group’s working
capital is especially acute in the ERI platform, where certain project cashflows have been
impacted by COVID-related disruption and margin deterioration.

For additional context, the Group conducts quarterly project reviews across all platforms,
where project progress is measured and estimated project revenue and cost at completion are
updated taking the latest information into consideration. Early in October, the Group was
informed by the ERI platform that as part of its quarterly project reviews, it was assessed that
the costs to complete two projects, Traveler in the United States and Waitsia in Australia, would
be significantly higher than the previous estimate, and that certain claims-related adjustments
to revenue were required, resulting in margin deterioration on both projects. The impact from
this margin deterioration is that profits recognised on these projects in previous financial years
would have to be reversed, which would lead to the Group’s next set of financial results for the
six months to 31 December 2022, to be more than 100% down on the previous and comparable
period. The reversal of previously recognised profits also impacts working capital.

Engagement with clients on the Traveler and Waitsia projects continue to be constructive with
the objective of improving their commercial positions. Both projects are expected to be near
completion by end-June 2023. All other projects within the ERI platform are progressing
according to expectations.

The order book reduced to R35,4 billion as at 30 September 2022 (June 2022: R37,3 billion),
with the platform recording near orders of R50,5 billion as at 30 September 2022 (June 2022:
R43,6 billion).

As previously announced, the Group is continuing to review several strategic options with
respect to addressing the ongoing and urgent cash flow needs of the ERI platform. The Group
is not at this stage contemplating raising new capital. The Group will provide a further update
to shareholders and the market in this regard as soon as possible.

POWER, INDUSTRIAL & WATER (“PIW”) PLATFORM

This Sub-Saharan-focused PIW platform provides complete project lifecycle services in the
power generation, transmission & distribution, water, oil & gas, petrochemical and resources
& industrial markets.

During the year, the business continued to face challenging market conditions, however the
PIW platform is actively engaging with Independent Power Producers that have been
shortlisted for projects in the South African renewable energy sector and is confident that
several work packages will be secured in the near term.

South Africa’s constrained transmission and distribution infrastructure requires urgent
investment to support additional capacity, which further presents longer-term potential for
OptiPower Projects, given its specialised capability in high and medium voltage transmission
and distribution lines, as well as substation infrastructure.
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The PIW platform’s order book reduced to R0,3 billion as at 30 September 2022 (June 2022:
R0,4 billion). The platform recorded near orders of R1,9 billion as at 30 September 2022 (June
2022: R1,9 billion). However, OptiPower Projects is in final negotiations with a developer on
three significant contracts as part of REIPPP Round 5. These three contracts make up a
significant portion of the platform’s R1,9 billion near order pipeline and an imminent award is
expected.

The Group believes that the current emphasis on increasing investment in utility scale
renewable energy projects is expected to enable the platform to return to profitability in the
near term.

POTENTIAL SALE OF THE GROUP’S 50% SHAREHOLDING IN THE BOMBELA
CONCESSION COMPANY

The process for the potential disposal of the Group’s 50% non-strategic shareholding in the
Bombela Concession Company (“BCC”) is progressing well, with several parties having
expressed interest in acquiring the asset.

Through the disposal of this investment, the Group will realise the present value of its expected
dividends from this investment over the next three years to the end of the concession period,
now, as opposed to over the next three years. The Group believes it should be able to realise
the full value of its investment in BCC, should the disposal proceed. The proceeds from the
disposal will be utilised to reduce debt in South Africa.

The Group will provide further updates to stakeholders in due course as appropriate.

TRADING STATEMENT

As engagement with clients on the Traveler and Waitsia projects are still ongoing, the board
of directors of the Company does not yet have certainty regarding the precise impact on
earnings per share for the financial results for the six months to 31 December 2022. The Group
will, however, publish an updated trading statement once there is more certainty on these
ranges as previously communicated.

The information contained in this Business Update has not been reviewed and reported on by
the Group’s external auditors.

Bedfordview
3 November 2022

Sponsor
The Standard Bank of South Africa Limited