2.8 Income statement adjustments

Restated

Restated

R millions

31.12.04

30.6.05

INCOME STATEMENT Earnings attributable to ordinary shareholders as reported under SA GAAP

244

448

SA GAAP adjustments Adjustment to depreciation of headlease investment property

2

–

Recognition of operating lease income and expense on a straight-line basis*

4

–

Goodwill

5

5

IFRS adjustments Revenue recognition

(4)

(8)

Loss on disposal of minority interest in subsidiary companies

4

Property, plant and equipment - depreciation

12

22

Intangible assets - amortisation

(1)

(2)

Share options expense

(2)

(4)

Deferred taxation impact on IFRS adjustments

(2)

(5)

Cumulative impact of other non-material adjustments

(4)

10

Earnings attributable to ordinary shareholders as reported under IFRS

254

470

*June 2005 was previously adjusted for the recog nition of operating leases on a straight-line basis. 3. Earnings from discontinued operations On 1 October 2005, the Group disposed its forklift truck distribution business Criterion Equipment for approximately R90 million. The comparative numbers include businesses that were closed or disposed off in the prior year, being Consani Engineering, Improvair and Booker Tate. R millions

31.12.05

31.12.04

30.6.05

The earnings from the discontinued operation is analysed as follows: Profit (loss) on disposal/closure

18

(28)

(53)

Earnings after taxation for the period

(4)

1

4

14

(27)

(49)

The earnings after taxation for the period is analysed as follows: Revenue

46

269

403

EBITDA

2

7

19

Depreciation

(1)

(5)

(7)

EBIT

1

2

12

Net interest expense

(1)

(4)

(5)

Earnings before taxation

–

(2)

7

Taxation

(4)

3

(3)

Earnings after taxation

(4)

1

4

COMMENTARY On behalf of the directors we are pleased to announce a 33% increase in the interim ordinary dividend to 20 cents per share in respect of the half-year ended 31 December 2005. This reflects our confidence in the prospects for our markets and the strategy of the Group following five years of Rebuilding Murray & Roberts. It is the intention of the Board to proceed with a dividend policy of between 2,8 and 3,2 times cover on full-year headline earnings. Attention is drawn to the formal dividend announcement contained herein. Headline earnings for the half-year include an expense of R95 million relating to the Group's Broad-Based Black Economic Empowerment (BBBEE) transaction. Excluding this expense, headline earnings of 65 cents per share for the previous half-year to 30 December 2004 has been maintained. Changes in the income statement relative to the previous reporting period reflect disposal of the Group’s minority interest in Unitrans and the impact of new acquisitions including Ocon Brick and associate Clough. Ongoing operating profit increased by 50% to R301 million (2004: R201 million) with improved contributions from all business segments. Ongoing revenues for the period increased marginally by 9%, with the Group's SADC construction activities recording a relative 30% decline in turnover. Despite a poor interim result from SADC Construction, the Construction & Engineering sector recorded strong growth in operating profits on a turnaround in both Middle East Construction and in Engineering, supported by good growth in Mining Contracting. The result includes a fair value adjustment on concession investments at a similar level to the prior half-year. The South African construction economy continues to offer growth. An increase in infrastructure investment is benefiting the Group’s Construction Materials & Services operations. The building materials market remains buoyant and the inclusion of new acquisition Ocon Brick has boosted the half-year performance in this sector. Closure and disposal of non-core businesses and the impact of a strong currency resulted in a slight decline in performance from the Fabrication & Manufacture sector. Minority partners in our business activities recorded an increase in after tax profits to R21 million (2004: R9 million) for the period. Associate company Clough is working through its historic problem contracts. A loss of R13 million has been recorded in the Group’s half-year accounts which recognises an adjustment for pre-acquisition project losses in Clough. The board of Clough has informed its shareholders that its "Outlook for the second half of the financial year is a significant improvement to that recorded thus far.” Most of the net financing income of R21 million (2004: expense of R5 million) will be reversed in the second half of the financial year. This follows recent and planned cash outflows of more than R1,0 billion to fund the Ocon Brick, Clough, Concor and Empowerment