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MURRAY & ROBERTS HOLDINGS LIMITED - Reviewed interim results for the six months ended 31 December 2018

Release Date: 06/03/2019 15:42
Code(s): MUR     PDF:  
 
Wrap Text
Reviewed interim results for the six months ended 31 December 2018

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
("Murray & Roberts" or "Group" or "Company")

REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2018


SALIENT FEATURES
Revenue from continuing operations decreased by 17% to R9,8 billion
(FY2018 H1: R11,8 billion)

Diluted continuing HEPS decreased by 2% to 54 cents
(FY2018 H1: 55 cents)

Attributable earnings increased by 69% to R186 million
(FY2018 H1: R110 million)

Cash, net of debt, decreased to R1,0 billion
(FY2018 H1: R1,3 billion; FY2018: R2,0 billion)

Order book for continuing operations increased to R31,7 billion
(FY2018 H1: R22,1 billion; FY2018: R30,1 billion)


- Lower contributions from Oil & Gas and Power & Water platforms, partly offset by strong
  Underground Mining performance. Underground Mining platform order book increased to 
  R25,7 billion (FY2018 H1: R15,3 billion). 
- Strong balance sheet and cash position.
- Lost time injury frequency rate ("LTIFR") improved to 0.63 (FY2018 H1: 1.19). No fatal injuries occurred.
- Independent Board maintains its view that a fair value price range for control is between ZAR20.00 and 
  ZAR22.00 per ordinary share.


STAKEHOLDER REPORT - SIX MONTHS TO DECEMBER 2018#
The Group has been transformed from being a predominantly South African civil and building contractor, to 
a multinational engineering and construction Group focused on the natural resources market sectors.

The Group's three business platforms (Underground Mining, Oil & Gas and Power & Water) provide portfolio
diversification. Core market segments and selected complementary market segments are of strategic importance 
to each of the three platforms, as these segments collectively mitigate the impact of market cyclicality.

Strategic flexibility - accelerating the Group's acquisitive growth
Considering current expectations and changing conditions for the Group's target market sectors, organic growth 
has to be supplemented by acquisitive growth. Since the start of the second half of the financial year, the 
Group concluded an acquisition in each of the Oil & Gas and Power & Water platforms respectively:

Oil & Gas - acquired a USA-based engineering, procurement and construction ("EPC") business from Saulsbury 
Industries. This is a strong organisation, staffed by experienced people with full EPC capability for 
projects up to US$500 million. Although a small acquisition, valued at US$5,2 million, it is strategically 
significant. This acquisition of an oil and gas EPC contractor based in Houston, gives the platform the 
ability to deliver projects into a strongly growing market in the USA.
 
Power & Water - acquired South Africa-based Optipower for a purchase consideration of R37 million. This acquisition
takes the platform firmly into the transmission, distribution and substation sectors of the power market. Eskom requires
extensive transmission work in South Africa, with 300km of 400KV overhead line currently out on enquiry. Several other
transmission opportunities are being actively pursued in sub-Saharan Africa - specifically Mozambique, Kenya, Ghana,
Angola and Uganda.
 
Independent Board update on the Mandatory Offer by ATON GmbH ("ATON")
Implementation of ATON's mandatory offer ("Mandatory Offer") to acquire up to 100% of the issued ordinary shares of
Murray & Roberts, not already owned by ATON, remains subject to certain suspensive conditions, specifically receipt 
of the required regulatory approvals in relevant jurisdictions. Conditional merger approval was obtained in Zambia
and unconditional approval in Namibia, whilst merger approval is still under consideration by the relevant authorities 
in South Africa and Canada. 

The long-stop date for the Mandatory Offer is 31 March 2019, a date which may be extended by ATON. In the event of
ATON announcing that the Mandatory Offer has become unconditional in all respects prior to the long-stop date, 
Murray & Roberts' shareholders will have 10 business days from the date of such announcement to accept the Mandatory
Offer, should they choose to accept the offer. In the event that the Mandatory Offer does not become unconditional 
prior to the long-stop date and ATON elect not to extend the long-stop date, the Mandatory Offer will terminate in 
accordance with its terms.
 
Shareholders are reminded that ATON's cash offer price of ZAR17.00 per Murray & Roberts' ordinary share remains below
the view of the independent board ("Independent Board") that a fair value price range for control of Murray & Roberts 
is between ZAR20.00 and ZAR22.00 per ordinary share. The Independent Board has refreshed its valuation of the Group, 
taking into account the latest market developments, and maintains its view that a fair value price range for control 
is between ZAR20.00 and ZAR22.00 per ordinary share.

The Independent Board accepts responsibility for the information contained in this update and certifies that, to the
best of the knowledge and belief of its members, the information contained in this announcement is true and nothing has
been omitted which is likely to affect the importance of the information.

The Independent Board will continue to update shareholders on all relevant matters pertaining to the Mandatory Offer.

FINANCIAL REPORT
Financial Results
Revenue from continuing operations decreased by 17% to R9,8 billion (FY2018 H1: R11,8 billion) and attributable earnings 
increased by 69% to R186 million (FY2018 H1: R110 million). Diluted continuing headline earnings per share ("HEPS")
decreased by 2% to 54 cents (FY2018 H1: 55 cents). Cash, net of debt, decreased to R1,0 billion (FY2018 H1: R1,3 billion;
FY2018: R2,0 billion). 

Capital expenditure for the six months under review was R357 million (FY2018 H1: R178 million), predominantly in the
Underground Mining platform, of which R340 million (FY2018 H1: R151 million) was for expansion and R17 million (FY2018
H1: R27 million) for replacement.

The order book for continuing operations increased to R31,7 billion (FY2018 H1: R22,1 billion; FY2018: R30,1 billion).

The effective taxation rate of 38% (FY2018 H1: 38%) is high, in the main due to withholding tax in foreign jurisdictions,
profits earned in high tax rate jurisdictions, losses incurred in low tax jurisdictions and tax losses not applied.

Dividend Update
In terms of the Group's dividend policy, the board of directors of the Company ("Board") will consider a full-year
dividend post year-end.

OPERATIONAL REPORT
Order Book, Near Orders and Project Pipeline

The Group's order book is of a high quality. Significant growth has been recorded in the Underground Mining platform 
order book. The lower order book in the Oil & Gas and Power & Water platforms is reflective of current market conditions. 
Based on near orders, a substantial increase in the Oil & Gas platform is expected during FY2019 H2.  

                                                            Pipeline
R billions                   Order book    Near orders    Category 1    Category 2   Category 3    
Oil & Gas                           4,4           14,2          33,2          73,0        298,7    
Underground Mining                 25,7            8,1          20,5          31,3         22,0    
Power & Water                       1,6              -           4,2           9,3         26,3    
31 December 2018 totals            31,7           22,3          57,9         113,6        347,0    
30 June 2018 totals                30,1            7,9          63,8         125,9        417,4    

- Near orders: Tenders where the Group is the preferred bidder and final award is subject to financial/commercial
  close - there is more than a 95% chance that these orders will be secured.
- Category 1: Tenders submitted or tenders the Group is currently working on (excluding near orders) - projects
  developed by clients to the stage where firm bids are being obtained - chance of being secured as projects a 
  function of final client approval as well as bid win probability.
- Category 2: Budgets, feasibilities and prequalification the Group is currently working on - project planning
  underway, not at a stage yet where projects are ready for tender.
- Category 3: Opportunities which are being tracked and are expected to come to market in the next 36 months -
  identified opportunities that are likely to be implemented, but still in pre-feasibility stage.

Oil & Gas Platform
                                                                         Commissioning     Corporate
R millions              Engineering     Construction    Global Marine    & Maintenance      & Other             Total
December                2018   2017    2018     2017    2018    2017     2018     2017    2018    2017     2018       2017    
Revenue                  430    536   1 049      118       -       -    1 667    3 963     210      76    3 356      4 693    
Operating profit/(loss)   23     48     (40)     (44)     (9)    (21)     281      293    (255)   (177)       -         99    
Margin(%)                 5%     9%     (4%)    (37%)      -       -      17%       7%       -       -        -         2%    
Order book               507    283   2 747      992       -       -    1 122    2 540       -       -    4 376      3 815    
Segment assets                                                                                            2 525      2 656    
Segment liabilities                                                                                       2 019      2 411    
LTIFR (fatalities)                                                                                       0.24(0)    0.30(0)    

Revenue decreased to R3,4 billion (FY2018 H1: R4,7 billion). In a competitive market with high pressure on margins,
the platform recorded a break-even in earnings before interest and tax for FY2019 H1 (FY2018 H1: R99 million operating
profit). The order book increased to R4,4 billion (FY2018 H1: R3,8 billion). 

Large oil and gas projects under execution by this platform will be completed in FY2019 H2. The current financial year
has been characterised by the delay in the award of new projects. Tenders for several of these projects are expected to
be adjudicated mid to-late calendar 2019. This set of circumstances is expected to have a considerable negative impact
on FY2019 revenue and earnings of this platform. 

New opportunities in the Liquefied Natural Gas ("LNG") market in Australia remain limited, although globally, new
supply capacity must be developed to meet LNG forecast demand as from 2021/22. The platform is targeting potential LNG
projects in the USA, Canada, Mozambique and Papua New Guinea.

Target opportunities are being pursued in complementary growth markets, such as the metal & minerals and
infrastructure sectors in Australia, in which this platform has experience and capability.

Recently, the Clough-Salini joint venture was selected as the preferred tenderer for the civil work packages on the
multi-billion dollar Snowy 2.0 project in Australia. Clough has a 35% share in the joint venture. Formal award of this
project is expected during FY2019 H2. The platform also secured the AU$130 million BHP Billiton Ore Handling Plant project
in Australia. The project scope includes structural, mechanical, piping, electrical and instrumentation work, as well as
interconnecting conveyors and transfer stations. These two projects are expected to contribute towards earnings in
FY2020.

Underground Mining Platform

R millions                      Africa               Australasia           The Americas              Total
December                    2018      2017         2018      2017         2018      2017         2018     2017    
Revenue                    1 340     1 874        1 378       926        2 231     1 325        4 949    4 125    
Operating profit             107       101           77        70          162        68          346      239    
Margin(%)                     8%        5%           6%        8%           7%        5%           7%       6%    
Order book                12 177     9 307        4 627     2 694        8 866     3 287       25 670   15 288    
Segment assets               835     1 101        1 423       977        2 523     1 572        4 781    3 650    
Segment liabilities          883       999          740       331        1 079       433        2 702    1 763    
LTIFR (fatalities)        2.14(0)   2.47(0)      0.00(0)   3.29(1)      0.00(0)   1.89(0)      1.08(0)  2.51(1)    

This global business is performing extremely well and continues to experience increasing demand for its services.
Commodity prices in general have increased and there is a positive change in sentiment towards investment in the 
industry. Revenue and operating profit increased to R4,9 billion (FY2018 H1: R4,1 billion) and R346 million 
(FY2018 H1: R239 million) respectively. The platform order book increased to R25,7 billion (FY2018 H1: 
R15,3 billion), with project awards across all jurisdictions. 

The platform is engaged in projects in Australia, Indonesia, Mongolia, the USA, Canada, Mexico, South Africa and Zambia.
Current projects include 18 vertical shaft sinking and equipping projects, 21 decline shaft and mine development projects,
8 contract mining projects and 13 support and construction services projects. The platform also has 37 raise drilling machines 
deployed in various locations across the globe.

Its global reach, broad range of services and reputation for safe and successful project delivery, has positioned the
platform favourably to capitalise on the underground mining market's large project investment pipeline. It is expected
that the platform will continue to make a significant contribution to Group earnings.

Power & Water Platform
                                                                         Electrical &          Corporate
R millions                  Power1         Water        Oil & Gas       Instrumentation        & Other              Total
December                 2018    2017   2018   2017   2018    2017      2018      2017       2018    2017      2018       2017    
Revenue                 1 143   2 358     14     26    231     178        20        81          -       -     1 408      2 643    
Operating profit/(loss)   131     150      1      7    (79)    (19)        5        11        (55)    (98)        3         51    
Margin(%)                 11%      6%     7%    27%   (34%)   (11%)      25%       14%          -       -         -         2%    
Order book                968   2 387      -      -     21     287         4        23        592       -     1 585      2 697    
Segment assets                                                                                                  775      1 438    
Segment liabilities                                                                                             873      1 039    
LTIFR (fatalities)                                                                                           0.24(0)    0.40(0)    
1 All power sector projects, including Power Programme (Medupi & Kusile).

Revenue, operating profit and order book decreased to R1,4 billion (FY2018 H1: R2,6 billion), R3 million (FY2018 H1:
R51 million) and R1,6 billion (FY2018 H1: R2,7 billion) respectively. The platform has one loss making project which will
be completed in FY2019.

The platform's scope of work on the Medupi power station has been completed and its work on the Kusile power station
will continue into FY2020. For several years platform earnings were underpinned by the contribution from these two
projects. The lack of meaningful work to replace Medupi and Kusile will result in reduced platform revenue and earnings.

The Baseload Coal Independent Power Producer Procurement Programme in South Africa continues to be delayed. As a
result, the platform is targeting opportunities in other sectors of the power market, such as power plant repair and
maintenance work in South Africa, as well as high voltage transmission infrastructure projects in South Africa and 
sub-Saharan Africa. Several tenders have been submitted, although adjudication is not expected imminently.

Investment in the local water sector continues to be limited and fragmented, notwithstanding increasing pressure to
upgrade dysfunctional municipal wastewater treatment plants.

Two projects were recently secured in complementary markets, at a combined value of R600 million; work on a sulphur
dioxide abatement facility for Anglo Platinum and the erection of a recovery boiler for Sappi. These were two of the
larger project opportunities available, which is indicative of current market conditions.

Investments
The Group's investment in the Bombela Concession Company yielded earnings of R114 million (FY2018 H1: R139 million).
FY2018 H1 included a one-off fair value gain of R25 million following an amendment in the operating company fee
structure, which resulted in a reduction in the fee payable to the operator.

BOMBELA & MIDDLE EAST

                               Bombela
R millions                   Investments           Middle East              Total
December                   2018     2017         2018      2017         2018     2017    
Revenue                       -        -           66       347           66      347    
Operating profit/(loss)     114      139           11       (67)         125       72    
Margin(%)                     -        -          17%      (19%)        189%      21%    
Order book                    -        -           46       267           46      267    
Segment assets            1 295    1 376        1 206     1 577        2 501    2 953    
Segment liabilities         361       32        1 295     1 367        1 656    1 399    

Middle East Business 
In FY2016 the Board decided to close the business in the Middle East. Due to exchange rate movements, this business
recorded a half-year marginal operating profit of R11 million (FY2018 H1: R67 million operating loss). Takeover 
certificates for the final four projects now completed should be received by end-April 2019. The Dubai Airport 
arbitration panel is expected to make its award by 31 March 2019. 

Discontinued Operations

                      I&B Businesses         Clough             Genrec
R millions               & Other2           Properties         Engineering            Total
December             2018      2017       2018     2017       2018    2017       2018    2017    
Revenue                 -       145          -        3         45     189         45     337    
Operating loss        (24)      (43)        (1)      (1)       (12)    (90)       (37)   (134)    
2 Includes Construction Products Africa.

Discontinued Operations
The operating loss from discontinued operations for the six months was R37 million (FY2018 H1: R134 million).

HEALTH AND SAFETY 
The Group's LTIFR remains industry leading at 0.63 (FY2018 H1: 1.19). No fatal injuries occurred. We remain firm in
the belief that Zero Harm is possible, notwithstanding the risk conditions in which projects are being built.

NEW REVENUE RECOGNITION STANDARD - IFRS 15
Uncertified revenue decreased to R650 million (FY2018: R1,3 billion). This reduction includes an adjustment
following the implementation of the new revenue recognition standard, IFRS 15. In terms of IFRS 15, revenue can only 
be recognised to the extent that it is "highly probable" that a significant reversal will not occur in future. This 
new standard increases the threshold for revenue recognition, as the previous threshold was "probable". The total 
adjustment to uncertified revenue and revenue previously recognised, reflected as an adjustment to equity, came to 
R1,1 billion. The Group remains confident that all uncertified revenue and revenue previously recorded as such, will 
be recognised once attendant commercial matters have been settled.

GRAYSTON TEMPORARY WORKS COLLAPSE - UPDATE
The Department of Labour instituted a Section 32 Inquiry ("Inquiry") in November 2015 into this incident to determine
the cause or causes of the collapse of the temporary works structure. The Inquiry has been concluded and it is expected
that the presiding officer will submit his report to the National Director of Public Prosecution, by April 2019. 

PROSPECTS STATEMENT
The Underground Mining platform is operating in a buoyant market and is well positioned to achieve strong growth over
the next few years. The Oil & Gas and Power & Water platforms continue to face challenging market conditions, with
low levels of  client investment and new projects experiencing delays and deferrals. Globally, the oil and gas market 
is showing definite signs of recovery. Opportunities are being pursued in selected complementary market segments, 
which mitigates the impact of down cycles in core market segments. 

The Group is committed to drive sustainable growth and remains confident that its growth plans over the medium term
are achievable, factoring in the constraints of current market dynamics.

Any forward-looking information contained in this announcement has not been reviewed and reported on by the Group's
external auditors.

On behalf of the directors:
Suresh Kana                      Henry Laas                       Dani?l Grobler
Chairman of the Board            Group Chief Executive            Group Financial Director

Bedfordview
6 March 2019

Registered office:                 Registrar:
Douglas Roberts Centre,            Link Market Services South Africa
22 Skeen Boulevard,                Proprietary Limited
Bedfordview 2007                   13th Floor, Rennie House, 
                                   19 Ameshoff Street, Braamfontein, 2001

PO Box 1000                        PO Box 4844
Bedfordview 2008                   Johannesburg 2000

Sponsor
The Standard Bank of South Africa Limited

Directors
SP Kana* (Chairman) HJ Laas (Managing & Chief Executive) DF Grobler R Havenstein* NB Langa-Royds* AK Maditsi* 
E Mashilwane* XH Mkhwanazi* DC Radley* KW Spence^* 

Secretary 
L Kok

^ Australian
* Independent non-executive 
# The operating performance information disclosed has been extracted from the Group's operational reporting systems.
  The Corporate & Properties segment has been excluded from the operational narrative. Unless otherwise noted, all
  comparisons are to the Group's performance as at and for the six months ended 31 December 2017.


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE
for the six months ended 31 December 2018
                                                                               Reviewed          Reviewed        Audited    
                                                                            6 months to       6 months to         Annual     
                                                                            31 December       31 December        30 June     
R millions                                                                         2018              2017           2018    
Continuing operations                                                       
Revenue                                                                           9 782            11 809         21 847    
- Continuing operations excluding Middle East                                     9 716            11 462         21 379    
- Middle East                                                                        66               347            468    
Profit before interest, depreciation and amortisation                               600               589          1 331    
Depreciation                                                                       (204)             (218)          (429)    
Amortisation of intangible assets                                                   (20)              (22)           (38)    
Profit before interest and taxation (note 2)                                        376               349            864    
- Continuing operations excluding Middle East                                       365               416            898    
- Middle East                                                                        11               (67)           (34)    
Net interest expense                                                                 (8)              (17)           (41)   
Profit before taxation                                                              368               332            823    
Taxation                                                                           (140)             (126)          (298)    
Profit after taxation                                                               228               206            525    
(Loss)/income from equity accounted investments                                      (1)               15             21    
Profit from continuing operations                                                   227               221            546    
Loss from discontinued operations (note 3)                                          (39)             (114)          (278)    
Profit for the period                                                               188               107            268    
Attributable to:                                                                                                            
- Owners of Murray & Roberts Holdings Limited                                       186               110            267    
- Non-controlling interests                                                           2                (3)             1    
                                                                                    188               107            268    
Earnings per share from continuing and discontinued operations (cents)                                                      
- Diluted                                                                            46                27             66    
- Basic                                                                              47                28             67    
Earnings per share from continuing operations (cents)                                                                       
- Diluted                                                                            55                55            134    
- Basic                                                                              57                56            137    
Supplementary information                                                                                                   
Net asset value per share (Rands)                                                    13                14             15    
Dividends per share (cents)                                                           -                 -             50    
Number of ordinary shares in issue ('000)                                       444 736           444 736        444 736    
Reconciliation of weighted average number of shares in issue ('000)                                                         
Weighted average number of ordinary shares in issue                             444 736           444 736        444 736    
Less: Weighted average number of shares held by The Murray & Roberts Trust            -               (10)            (5)   
Less: Weighted average number of shares held by the Letsema BBBEE trusts        (31 696)          (31 696)       (31 696)    
Less: Weighted average number of shares held by the subsidiary companies        (15 386)          (15 988)       (14 893)    
Weighted average number of shares used for basic per share calculation          397 654           397 042        398 142    
Add: Dilutive adjustment                                                          8 053             7 026          7 803    
Weighted average number of shares used for diluted per share calculation        405 707           404 068        405 945    
Earnings per share from continuing operations (cents)                                                                       
- Diluted                                                                            55                55            134    
- Adjusted diluted earnings per share excluding Middle East                          52                72            142    
- Diluted earnings per share contributed by Middle East                               3               (17)            (8)    
- Basic                                                                              57                56            137    
- Adjusted basic earnings per share excluding Middle East                            54                74            145    
- Basic earnings per share contributed by Middle East                                 3               (18)            (8)    
Headline earnings per share from continuing and discontinued                
operations (cents) (note 4)                                                 
- Diluted                                                                            45                28             46    
- Basic                                                                              46                28             47    
Headline earnings per share from continuing operations (cents) (note 4)                                                     
- Diluted                                                                            54                55            112    
- Adjusted diluted headline earnings per share excluding                             51                72            120    
  Middle East                                                                                                                 
- Diluted headline earnings per share contributed by Middle East                      3               (17)            (8)    
- Basic                                                                              56                56            114    
- Adjusted basic headline earnings per share excluding Middle East                   53                74            122    
- Basic headline earnings per share contributed by Middle East                        3               (18)            (8)    


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 December 2018
                                                                               Reviewed          Reviewed        Audited    
                                                                            6 months to       6 months to         Annual     
                                                                            31 December       31 December        30 June     
R millions                                                                         2018              2017           2018    
Profit for the period                                                               188               107            268    
Items that will not be reclassified subsequently to profit or loss:                                                         
Effects of remeasurements on retirement benefit obligations                           -                 -              3    
Items that will be reclassified subsequently to profit or loss:                                                             
Exchange gains/(losses) on translating foreign operations            
and realisation of reserve                                                           14              (160)            96    
Total comprehensive income/(loss) for the period                                    202               (53)           367    
Attributable to:                                                                                                            
- Owners of Murray & Roberts Holdings Limited                                       199               (50)           363    
- Non-controlling interests                                                           3                (3)             4    
                                                                                    202               (53)           367    


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2018
                                                                               Reviewed          Reviewed        Audited    
                                                                            6 months to       6 months to         Annual     
                                                                            31 December       31 December        30 June     
R millions                                                                         2018              2017           2018    
ASSETS                                                                                                                      
Non-current assets                                                                5 049             5 168          5 253    
Property, plant and equipment                                                     2 139             1 877          1 996    
Investment property                                                                   -                19              -    
Goodwill (note 5)                                                                   617               601            616    
Deferred taxation assets                                                            315               538            385    
Investments in associate companies                                                    3                23              3    
Investment in joint venture                                                          71                73             72    
Amounts due from contract customers (note 6)                                        345               513            568    
Other non-current assets                                                          1 559             1 524          1 613    
Current assets                                                                    8 545             8 770          8 982    
Inventories                                                                         345               318            279    
Trade and other receivables                                                       1 147               939          1 076    
Amounts due from contract customers (note 6)                                      4 791             5 223          5 089    
Current taxation assets                                                              22                26             74    
Cash and cash equivalents                                                         2 240             2 264          2 464    
Assets classified as held for sale                                                   51               351             51    
TOTAL ASSETS                                                                     13 645            14 289         14 286    
EQUITY AND LIABILITIES                                                                                                      
Total equity                                                                      5 615             6 310          6 744    
Attributable to owners of Murray & Roberts Holdings Limited                       5 588             6 269          6 696    
Non-controlling interests                                                            27                41             48    
Non-current liabilities                                                             848               548            505    
Long-term liabilities3                                                              526               191            147    
Long-term provisions                                                                113               132            126    
Deferred taxation liabilities                                                        71                68             75    
Other non-current liabilities                                                       138               157            157    
Current liabilities                                                               7 182             7 313          7 037    
Amounts due to contract customers (note 6)                                        1 782             1 625          1 527    
Trade and other payables                                                          4 684             4 882          5 102    
Current taxation liabilities                                                         39                58             63    
Bank overdrafts3                                                                    102               523            111    
Short-term liabilities3                                                             575               225            234    
Liabilities classified as held for sale                                               -               118              -    
TOTAL EQUITY AND LIABILITIES                                                     13 645            14 289         14 286    
3 Interest-bearing borrowings.


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 December 2018
                                                                                  Attributable
                                                                                     to owners
                                                                                     of Murray
                                                                                     & Roberts              Non-                  
                                        Stated         Other       Retained           Holdings       controlling         Total     
R millions                             capital      reserves       earnings            Limited         interests        equity    
Balance at 30 June 2017 (Audited)        2 566           997          2 978              6 541                64         6 605    
Total comprehensive 
(loss)/income for the period                 -          (160)           110                (50)               (3)          (53)    
Treasury shares disposed (net)              10             -              -                 10                 -            10    
Recognition of share-based payment           -            10              -                 10                 -            10    
Utilisation of share-based 
payment reserve                              -           (48)             -                (48)                -           (48)    
Dividends declared and paid                  -             -           (194)              (194)                -          (194)    
Repayment of equity loans 
from non-controlling interests               -             -              -                  -               (20)          (20)    
Balance at 31 December 2017 
(Reviewed)                               2 576           799          2 894              6 269                41         6 310    
Total comprehensive income 
for the period                               -           256            157                413                 7           420    
Treasury shares disposed (net)              15             -              -                 15                 -            15    
Recognition of share-based payment           -            12              -                 12                 -            12    
Utilisation of share-based 
payment reserve                              -            (7)             -                 (7)                -            (7)    
Transfer to retained earnings                -            (1)             1                  -                 -             -    
Dividends declared and paid                  -             -             (6)                (6)                -            (6)    
Balance at 30 June 2018 (Audited)        2 591         1 059          3 046              6 696                48         6 744    
Impact of IFRS 9 adjustment                  -             -             (9)                (9)                -            (9)    
Impact of IFRS 15 adjustment                 -             -         (1 072)            (1 072)              (24)       (1 096)    
Balance at 1 July 2018 (Restated)        2 591         1 059          1 965              5 615                24         5 639    
Total comprehensive income 
for the period                               -            13            186                199                 3           202    
Treasury shares disposed (net)               2             -              -                  2                 -             2    
Recognition of share-based payment           -            14              -                 14                 -            14    
Utilisation of share-based 
payment reserve                              -           (31)             -                (31)                -           (31)    
Dividends declared and paid                  -             -           (211)              (211)                -          (211)    
Balance at 31 December 2018 
(Reviewed)                               2 593         1 055          1 940              5 588                27         5 615    


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 31 December 2018                                                                                   
                                                                               Reviewed          Reviewed        Audited    
                                                                            6 months to       6 months to         Annual     
                                                                            31 December       31 December        30 June     
R millions                                                                         2018              2017           2018    
Cash (utilised from)/generated by operations                                       (422)              400            934    
Interest received                                                                    41                31             66    
Interest paid                                                                       (51)              (50)          (112)    
Taxation paid                                                                       (43)             (106)          (174)    
Operating cash flow                                                                (475)              275            714    
Dividends paid                                                                     (211)             (194)          (200)    
Net cash (outflow)/inflow from operating activities                                (686)               81            514    
Dividends received from associate companies                                           -                 -             20    
Purchase of intangible assets other than goodwill                                   (28)               (6)           (13)    
Purchase of property, plant and equipment by                           
entities classified as held for sale                                                  -                (1)            (1)    
Purchase of property, plant and equipment                                          (128)              (82)          (311)    
- Replacements                                                                      (17)              (27)           (78)    
- Expansions                                                                       (340)             (151)          (358)    
- Capitalised finance leases raised (non-cash)                                      229                96            125    
Proceeds on disposal of property, plant and equipment                                20                76            116    
Net inflow on disposal of business                                                    -                 -             40    
Proceeds on disposal of investment in associate                                       -                 -             87    
Cash related to assets held for sale                                                  -               (26)             2    
Proceeds from realisation of investment                                             153               106            220    
Purchase of additional investment                                                     -              (357)          (357)    
Net realisation of other investments                                                  1                 -             (1)    
Other (net)                                                                           1                (2)            (2)    
Net cash inflow/(outflow) from investing activities                                  19              (292)          (200)
Net movement in borrowings (note 8)                                                 484              (163)          (217)    
Net acquisition of treasury shares                                                  (29)              (37)           (29)    
Net cash inflow/(outflow) from financing activities                                 455              (200)          (246)    
Total (decrease)/increase in net cash and cash equivalents                         (212)             (411)            68    
Net cash and cash equivalents at beginning of period                              2 353             2 253          2 253    
Effect of foreign exchange rates                                                     (3)             (101)            32    
Net cash and cash equivalents at end of period                                    2 138             1 741          2 353    
Net cash and cash equivalents comprises:                                                                                   
Cash and cash equivalents                                                         2 240             2 264          2 464    
Bank overdrafts                                                                    (102)             (523)          (111)    
Net cash and cash equivalents at end of period                                    2 138             1 741          2 353    


CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS
for the six months ended 31 December 2018
                                                                               Reviewed          Reviewed        Audited    
                                                                            6 months to       6 months to         Annual     
                                                                            31 December       31 December        30 June     
R millions                                                                         2018              2017           2018    
Revenue4                                                                                                                    
Bombela & Middle East                                                                66               347            468    
Power & Water                                                                     1 408             2 643          4 829    
Underground Mining                                                                4 949             4 125          8 004    
Oil & Gas                                                                         3 356             4 693          8 542    
Corporate & Properties                                                                3                 1              4    
Continuing operations                                                             9 782            11 809         21 847    
Discontinued operations                                                              45               337            525    
                                                                                  9 827            12 146         22 372    
Continuing operations                                                                                                       
Profit/(loss) before interest and taxation5                                                                                 
Bombela & Middle East                                                               125                72            243    
Power & Water                                                                         3                51            134    
Underground Mining                                                                  346               239            471    
Oil & Gas                                                                             -                99            209    
Corporate & Properties                                                              (98)             (112)          (193)    
Profit before interest and taxation                                                 376               349            864    
Net interest expense                                                                 (8)              (17)           (41)    
Profit before taxation                                                              368               332            823    
Discontinued operations                                                                                                     
Loss before interest and taxation5                                                  (37)             (134)          (273)    
Net interest expense                                                                 (2)               (2)            (5)    
Loss before taxation                                                                (39)             (136)          (278)    
4 Revenue is disclosed net of inter-segmental revenue. Inter-segmental revenue for the Group is 
  R104 million (FY2018 H1: R70 million).
5 The chief operating decision maker utilises profit/(loss) before interest and taxation in the 
  assessment of a segment's performance.


SEGMENTAL ASSETS (CONTINUING & DISCONTINUED)
at 31 December 2018
                                                                               Reviewed          Reviewed        Audited    
                                                                            6 months to       6 months to         Annual     
                                                                            31 December       31 December        30 June     
R millions                                                                         2018              2017           2018    
Bombela & Middle East                                                             2 501             2 953          3 061    
Power & Water                                                                       775             1 438          1 292    
Underground Mining                                                                4 781             3 650          3 757    
Oil & Gas                                                                         2 525             2 656          2 808    
Corporate & Properties6                                                             378               237            324    
Continuing operations                                                            10 960            10 934         11 242    
Discontinued operations7                                                            108               527            121    
                                                                                 11 068            11 461         11 363    
Reconciliation of segmental assets                                                                                          
Total assets                                                                     13 645            14 289         14 286    
Deferred taxation assets                                                           (315)             (538)          (385)    
Current taxation assets                                                             (22)              (26)           (74)    
Cash and cash equivalents                                                        (2 240)           (2 264)        (2 464)    
                                                                                 11 068            11 461         11 363    


SEGMENTAL LIABILITIES (CONTINUING & DISCONTINUED)
at 31 December 2018
                                                                               Reviewed          Reviewed        Audited    
                                                                            6 months to       6 months to         Annual     
                                                                            31 December       31 December        30 June     
R millions                                                                         2018              2017           2018    
Bombela & Middle East                                                             1 656             1 399          1 326    
Power & Water                                                                       873             1 039            956    
Underground Mining                                                                2 702             1 763          1 995    
Oil & Gas                                                                         2 019             2 411          2 334    
Corporate & Properties6                                                             355               381            460    
Continuing operations                                                             7 605             6 993          7 071    
Discontinued operations7                                                            213               337            222    
                                                                                  7 818             7 330          7 293    
Reconciliation of segmental liabilities                                                                                     
Total liabilities                                                                 8 030             7 979          7 542    
Deferred taxation liabilities                                                       (71)              (68)           (75)    
Current taxation liabilities                                                        (39)              (58)           (63)    
Bank overdrafts                                                                    (102)             (523)          (111)    
                                                                                  7 818             7 330          7 293    
6 Corporate segmental assets and liabilities include the inter-segment eliminations of group 
  balances and transactions.
7 Discontinued operations includes the close out of retained assets and liabilities, following 
  the sale of Genrec operations and the Southern African Infrastructure & Building businesses 
  in prior financial years.


NOTES
1. BASIS OF PREPARATION
   The Group operates in the mining, oil & gas and power & water markets and as a result the revenue is not 
   seasonal in nature but is influenced by the nature of the contracts that are currently in progress. Refer 
   to commentary for a more detailed report on the performance of the different operating platforms within 
   the Group.
   
   The condensed consolidated interim financial statements for the period ended 31 December 2018 have been 
   prepared in accordance with and contain the information required by International Financial Reporting 
   Standard (IAS) 34: Interim Financial Reporting, the SAICA Financial Reporting Guides, as issued by the 
   Accounting Practices Committee and the Financial Pronouncements as issued by the Financial Reporting 
   Standards Council and the requirements of the Companies Act of South Africa. The condensed consolidated 
   financial information was compiled under the supervision of DF Grobler (CA)SA, Group financial director.
   
   The accounting policies used in the preparation of these results are in accordance with International 
   Financial Reporting Standards (IFRS) and are consistent in all material respects with those used in the 
   audited consolidated financial statements for the year ended 30 June 2018. IFRS 9 (Financial Instruments) 
   and IFRS 15 (Revenue from Contracts with Customers) have been implemented in the current financial year, 
   refer to note 9 for further details.
   
   The independent auditor's review has been conducted in accordance with International Standards on Review 
   Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor, Deloitte & 
   Touche, and their unmodified review report is available for inspection at the Company's registered office. 
   Any reference to future financial performance included in this announcement has not been reviewed or 
   reported on by the Group's external auditors. The auditor's report does not necessarily report on all of 
   the information contained in this announcement/financial results. Shareholders are therefore advised that 
   in order to obtain a full understanding of the nature of the auditor's engagement they should obtain a 
   copy of the auditor's report together with the accompanying financial information from the registered office.
   
   The information presented in the notes below represents audited results for 30 June 2018 and reviewed results 
   for 31 December 2017 and 31 December 2018.

2. PROFIT BEFORE INTEREST AND TAXATION
                                                             31 December       31 December       30 June     
   R millions                                                       2018              2017          2018    
   Items by function                                                                                        
   Cost of sales                                                  (8 685)          (10 695)      (19 597)   
   Distribution and marketing expenses                                (3)               (3)          (13)   
   Administration costs                                           (1 004)             (990)       (1 984)   
   Other operating income                                            286               228           611    

3. LOSS FROM DISCONTINUED OPERATIONS
   Discontinued operations includes the close out of retained assets and liabilities, following the sale of Genrec 
   operations and the Southern African Infrastructure & Building businesses in prior financial years. These operations 
   met the requirements in terms of IFRS 5 Discontinued Operations and have been presented as discontinued operations 
   in the Group's statement of financial performance.
   
   3.1 LOSS FROM DISCONTINUED OPERATIONS
                                                             31 December       31 December       30 June     
   R millions                                                       2018              2017          2018    
   Revenue                                                            45               337           525    
   Loss before interest, depreciation and amortisation               (37)             (134)         (273)   
   Depreciation and amortisation                                       -                 -             -    
   Loss before interest and taxation (note 3.2)                      (37)             (134)         (273)   
   Net interest expense                                               (2)               (2)           (5)   
   Loss before taxation                                              (39)             (136)         (278)   
   Taxation credit                                                     -                22             -    
   Loss after taxation                                               (39)             (114)         (278)   
   Income from equity accounted investments                            -                 -             -    
   Loss from discontinued operations                                 (39)             (114)         (278)   
   Attributable to:                                                                                         
   - Owners of Murray & Roberts Holdings Limited                     (39)             (114)         (278)   
   - Non-controlling interests                                         -                 -             -    
                                                                     (39)             (114)         (278)   

   3.2 LOSS BEFORE INTEREST AND TAXATION
                                                             31 December       31 December       30 June     
   R millions                                                       2018              2017          2018    
   Loss before interest and taxation includes the 
   following significant items:                              
   Fair value adjustment on disposal group                             -                (8)          (13)   
   held for sale                                                                                            
                                                                                                            
   3.3 CASH FLOWS FROM DISCONTINUED OPERATIONS INCLUDE THE FOLLOWING:
                                                              31 December       31 December       30 June   
   R millions                                                        2018              2017          2018    
   Cash flow from operating activities                               (27)              (67)         (172)   
   Cash flow from investing activities                                 -               (27)           40    
   Cash flow from financing activities                                 -                49            (2)   
   Net decrease in cash and cash equivalents                         (27)              (45)         (134)   

4. RECONCILIATION OF HEADLINE EARNINGS
                                                             31 December       31 December       30 June     
   R millions                                                       2018              2017          2018    
   Profit attributable to owners of Murray & Roberts 
   Holdings Limited                                                  186               110           267    
   Profit on disposal of property, plant and 
   equipment (net)                                                    (5)               (2)          (13)   
   Profit on disposal of investment in associate                       -                 -           (80)   
   Reversal of impairment of property, plant and 
   equipment (net)                                                     -                (2)           (2)   
   Fair value adjustment on disposal group                             -                 8            13    
   held for sale                                                                                            
   Taxation effects on adjustments                                     1                (1)            3    
   Headline earnings                                                 182               113           188    
   Adjustments for discontinued operations:                                                                 
   Loss from discontinued operations                                  39               114           278    
   Fair value adjustment on disposal group
   held for sale                                                       -                (8)          (13)
   Taxation effects on adjustments                                     -                 2             -    
   Headline earnings from continuing operations                      221               221           453    

5. GOODWILL
                                                             31 December       31 December       30 June     
   R millions                                                       2018              2017          2018    
   At beginning of year                                              616               607           607    
   Foreign exchange movements                                          1                (6)            9    
                                                                     617               601           616    
   
   The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill 
   might be impaired. Based on the assessment performed as at 31 December 2018, no impairment was recorded.

6. CONTRACTS-IN-PROGRESS AND CONTRACT RECEIVABLES
                                                             31 December       31 December       30 June     
   R millions                                                       2018              2017          2018    
   Contracts-in-progress (cost incurred plus recognised profits, 
   less recognised losses)                                         1 439             2 082         1 796    
   Uncertified claims and variations less payments received on   
   account of R298 million (FY2018: R288 million)                    650             1 026         1 292    
   Amounts receivable on contracts (net of impairment provisions)  2 751             2 372         2 386    
   Retentions receivable (net of impairment provisions)              296               256           183    
                                                                   5 136             5 736         5 657    
   Amounts received in excess of work completed                   (1 782)           (1 625)       (1 527)   
                                                                   3 354             4 111         4 130    
   Disclosed as:                                                                                            
   Amounts due from contract customers - non-current8                345               513           568    
   Amounts due from contract customers - current                   4 791             5 223         5 089    
   Amounts due to contract customers - current                    (1 782)           (1 625)       (1 527)   
                                                                   3 354             4 111         4 130    
   8 The non-current amount is considered by management to be recoverable.
   
7. FINANCIAL INSTRUMENTS
   The Group's financial instruments consist mainly of deposits with banks, local money market instruments, 
   short-term investments, accounts receivable and payable and interest-bearing borrowings.
                                                             31 December       31 December       30 June     
   R millions                                                       2018              2017          2018    
   Categories of financial instruments                                                                      
   Financial assets                                                                                         
   Financial assets designated as fair value through 
   profit or loss (level 3)                                        1 270             1 283         1 308    
   Amortised cost9                                                 6 389             5 803         6 094    
   Financial liabilities                                                                                    
   Amortised cost10                                                5 202             5 196         4 746    
   9  Measurement category under the current IFRS 9. Prior period amount reflects loans and receivables 
      as per IAS 39. Measurement basis has not changed.
   10 Measurement category under the current IFRS 9. Prior period amount reflects loans and payables as 
      per IAS 39. Measurement basis has not changed.

   7.1 FINANCIAL ASSETS DESIGNATED AS FAIR VALUE THROUGH PROFIT OR LOSS

                                                             31 December       31 December       30 June     
       R millions                                                   2018              2017          2018    
       Investment in infrastructure service concession                                                      
       (level 3)11                                                                                          
       At beginning of year                                        1 308               893           893    
       Additions                                                       -               357           357    
       Realisation of investment                                    (153)             (106)         (220)   
       Fair value adjustment recognised in the statement of  
       financial performance                                         115               139           278    
                                                                   1 270             1 283         1 308    
    11 The Bombela Concession Company (RF) Proprietary Limited ("BCC") is reflected at fair value through
       profit or loss, as the investment meets the requirement of IAS 28.18 with regards to venture capital
       organisations or similar entities. There has been no change to the classification or measurement
       basis of the investment upon adoption of IFRS 9.

       The fair value of BCC is calculated using discounted cash flow models and a market discount rate of 18.5% 
       (FY2018: 18.5%). The discounted cash flow models are based on forecast patronage, operating costs, inflation 
       and other economic fundamentals, taking into consideration the operating conditions experienced in the 
       current financial year. The future profits from the concession are governed by a contractual agreement and 
       are principally based on inflationary increases in the patronage revenue and operating costs of the current 
       financial period.
       
       In the prior year a one-off fair value gain of R50 million (FY2018 H1:R25 million) was recognised following 
       an amendment in the operating company fee structure which resulted in a reduction in the fees payable to the 
       operator. The reduction in the operator fee payable is a cost input in the fair value model and therefore 
       resulted in an increase in fair value of the investment.

       Operating cost includes an operating fee that is payable to the Bombela Operating Company (Pty) Ltd 
       ("BOC"), the company responsible for the operation and maintenance of Gautrain. The fee payable to BOC 
       is subject to annual inflationary increases. The contract is subject to review every 5th year where 
       increases of more than inflation are considered. An annual operating fee increase of 1% above inflation 
       will result in a decrease in the value of the concession investment of approximately R9,0 million 
       (FY2018: R9,0 million).
       
       Operating cost also includes a Railway Usage Fee ("RUF") which constitutes a fee for the use of the 
       system owned by Gauteng Province. The fee is 50% of the concessionaires excess free cash flow above 
       an 18% real rate of return. The fee reduces to 35% should the concessionaire comply with certain Socio 
       Economic Development ("SED") obligations. Historically the SED obligations have been achieved and the 
       valuation is based on the SED obligations being achieved. If these obligations are not achieved, then 
       the result would be a decrease in the value of the concession investment of R301 million 
       (FY2018: R301 million).
       
       Revenue based on patronage is underpinned by the Gauteng Province. The Patronage Guarantee is the 
       difference between the Minimum Required Total Revenue ("MRTR") and the Actual Total Revenue ("ATR") in 
       each month. Due to the predictable nature of revenue it is not considered to be a significant unobservable 
       input and therefore no quantitative information is provided.
       
       A decrease of 1% in the discount rate would result in an increase in the value of the concession investment 
       of approximately R46,2 million (FY2018: R46,2 million).
   
   The above investment is included in other non-current assets on the condensed consolidated statement of 
   financial position.
   
8. NET MOVEMENT IN BORROWINGS
                                                             31 December       31 December       30 June 
   R millions                                                       2018              2017          2018 
   Loans raised                                                      595                 7            59 
   Loans repaid                                                      (40)              (59)         (109)
                                                                     555               (52)          (50)
   Capitalised leases repaid                                         (71)             (111)         (167)
                                                                     484              (163)         (217) 
 
9. CONTINGENT LIABILITIES
   The Group is from time to time involved in various disputes, claims and legal proceedings arising in the 
   ordinary course of business. The Group does not account for any potential contingent liabilities where a 
   back-to-back arrangement exists with the clients or subcontractors and there is a legal right to offset 
   (R2,4 billion). The Board does not believe that adverse decisions in any pending proceeding or claims 
   against the Group will have a material adverse effect on the financial condition or future of the Group.

                                                             31 December       31 December       30 June     
   R millions                                                       2018              2017          2018    
   Operating lease commitments                                     1 173             1 159         1 215    
   Contingent liabilities                                          2 691             2 210         2 297    
   Financial institution and Murray & Roberts                
   guarantees granted to third parties                             6 640             6 203         6 222    

   Update on the Group's claim processes    
   Uncertified revenue as at the end of the financial period decreased to R0,7 billion (FY2018: R1,3 billion) 
   largely due to the implementation of IFRS 15. It consists mainly of claims on projects in the Power & 
   Water platform and the Middle East.
   
   Grayston Temporary Works Collapse - Update
   The Department of Labour instituted a Section 32 Inquiry ("Inquiry") in November 2015 into this incident
   to determine the cause or causes of the collapse of the temporary works structure. The Inquiry has been 
   concluded and it is expected that the presiding officer will submit his report to the National Director 
   of Public Prosecution, by April 2019.
   
10. IMPLEMENTATION OF IFRS 15 (REVENUE FROM CONTRACTS WITH CUSTOMERS) AND IFRS 9 (FINANCIAL INSTRUMENTS)
    On 1 July 2018 the Group implemented IFRS 15 and IFRS 9, as these standards are applicable to financial 
    years commencing on or after 1 January 2018. 
    
    The Group decided to apply the modified retrospective approach to transition from existing IASs to IFRS 15 
    and IFRS 9.
    
    Therefore comparatives were not restated. The cumulative effect of initially applying IFRS 15 and IFRS 9 was an
    adjustment to the opening balance of retained earnings at the date of initial application, being 1 July 2018. 
    Due to the fact that the modified retrospective approach has been applied for both IFRS 15 and IFRS 9, there is 
    no resultant impact on IAS 33 (Earnings per Share).

    10.1 IMPLEMENTATION OF IFRS 15 (REVENUE FROM CONTRACTS WITH CUSTOMERS)    

         IAS 11 (Construction Contracts) stated that contract revenue shall comprise variations in contract work, 
         claims and incentive payments to the extent that it is probable that they will result in revenue.
         
         IFRS 15:56 states that variable consideration should only be included in the transaction price, when 
         recognising revenue, to the extent that it is highly probable that a significant reversal will not occur 
         when the uncertainty associated with the variable consideration is subsequently resolved. 
         
         IFRS 5 defines "highly probable" as "significantly more likely than probable", where "probable" means 
         "more likely than not" (IFRS 5: Appendix A). 
         
         Due to the higher threshold required for recognition and measurement purposes, IFRS 15 will result in the 
         delayed recognition of variable consideration until such time that it is highly probable that the revenue 
         will not be reversed when the uncertainty is resolved. 
         
         The cumulative effect of initially applying IFRS 15 was concluded at an amount of R1,1 billion at 
         1 July 2018. The IFRS 15 adjustment relates mainly to amounts in the Power & Water platform and the Middle 
         East. The Group remains confident that all uncertified revenue and revenue previously recorded as such, will 
         be recognised once attendant commercial matters have been settled.
         
         R millions
         Impact of adoption:
         Retained earnings impact:
         Retained earnings at 30 June 2018 (Audited)                                  3 046    
         IFRS 15 adjustment                                                          (1 072)   
         Retained earnings - before IFRS 9 adjustment                                 1 974    
         Total assets impact:                                                                  
         Non-current assets impact:                                                            
         Amounts due from contract customers at  1 July 2018                            568    
         IFRS 15 adjustment                                                            (239)   
         Restated amounts due from contract customers at  1 July 2018                   329    
         Current assets impact:                                                                
         Amounts due from contract customers at  1 July 2018                          5 089    
         IFRS 15 adjustment                                                            (857)   
         Restated amounts due from contract customers at  1 July 2018                 4 232    

    10.2 IMPLEMENTATION OF IFRS 9 (FINANCIAL INSTRUMENTS)    

         The impairment requirements under IFRS 9 are based on an expected credit loss ("ECL") model that replaces
         the IAS 39 incurred loss model. 
         
         The cumulative effect of initially applying the ECL model to assess impairments of receivables in IFRS 9 
         was concluded at an amount of R9 million.
         
         R millions
         Impact of adoption:
         Retained earnings impact:
         Retained earnings - before IFRS 9 adjustment, after IFRS 15 adjustment       1 974    
         IFRS 9 adjustment                                                               (9)   
         Restated retained earnings  1 July 2018 - IFRS 15 and IFRS 9                 1 965    
         
         The condensed consolidated statement of financial position impact of the above IFRS 9 adjustment of 
         R9 million is reflected under trade and other receivables. 

         Adoption of IFRS 9 has resulted in a change in measurement categories of financial instruments. For 
         change in relevant measurement categories applied, refer to note 7. 

11. DIVIDEND
    A gross annual dividend, relating to the 30 June 2018 financial year, of 50 cents per share was declared in 
    August 2018 and paid during the period. In line with the approved dividend policy, the board of directors will 
    only consider paying an annual dividend.

12. RELATED PARTY TRANSACTIONS
    There have been no significant changes to the nature of related party transactions since 30 June 2018 or any
    transactions outside the normal course of business.

13. EVENTS AFTER REPORTING DATE
    The directors are not aware of any matter or circumstance arising after the period ended 31 December 2018, not
    otherwise dealt with in the Group's interim results, which significantly affects the financial position as at 
    31 December 2018 or the results of its operations or cash flows for the period then ended.

DISCLAIMER
This announcement includes certain various "forward-looking statements" within the meaning of Section 27A of the 
US Securities Act 10 1933 and Section 21 E of the Securities Exchange Act of 1934 that reflect the current views 
or expectations of the Board with respect to future events and financial and operational performance. All 
statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, 
including, without limitation, those concerning: the Group's strategy; the economic outlook for the industry; 
and the Group's liquidity and capital resources and expenditure. These forward-looking statements speak only 
as of the date of this announcement and are not based on historical facts, but rather reflect the Group's current 
expectations concerning future results and events and generally may be identified by the use of forward-looking 
words or phrases such as "believe", "expect", "anticipate", "intend", "should", "planned", "may", "potential" or 
similar words and phrases. The Group undertakes no obligation to update publicly or release any revisions to these 
forward-looking statements to reflect events or circumstances after the date of this announcement or to reflect the 
occurrence of any unexpected events. Neither the content of the Group's website, nor any website accessible by 
hyperlinks on the Group's website is incorporated in, or forms part of, this announcement.

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