https://www.engineeringnews.co.za

Strained road sector may improve once e-tolling starts, Raubex asserts

22nd November 2013

By: Irma Venter

Creamer Media Senior Deputy Editor

  

Font size: - +

The local road construction industry will remain under pressure in the short term, with real relief only possible once the South African National Roads Agency Limited (Sanral) starts long-delayed e-tolling on the Gauteng freeways, says Raubex Group CEO Rudolf Fourie.

Fourie says Sanral has indicated that it will not build any of the additional toll roads planned before e-tolling has started on the almost 200 km of freeways upgraded so far under the Gauteng Freeway Improvement Programme.

He is hopeful tolling will start in the next six months, but notes that this hope has been dashed often over the last few years.

One other factor that can also potentially boost the local road-building sector is the push for Sanral to take over the respons- ibility for a number of provincial road networks.

“That will help us but, until then, we are forced to look to Africa to tide us over,” said Fourie.

At home, road specialist Raubex battled low margins in the first six months of its financial year, as there were simply too many companies competing for a limited number of contracts. The number of tenders also remained the same in recent years, says Fourie, but the number of competitors soared.

Around ten road-building companies have already been liquidated, or have had to apply for business rescue in the last two years, but additional attrition is still required.

Fourie expects margins in the local road construction industry to remain under pressure for at least the next six months.

“Again, we hope that our international order book can make up for this pressure.”

Raubex earned around 15% of its revenue in the rest of Africa.

Another diversified earner was the com-pany’s 18-month-old infrastructure business, which earlier this months reported a R882.3-million order book.

The division was established for Raubex to attain a more balanced portfolio of work, and specialises in disciplines outside the road construction sector, including energy, with a specific focus on renewable energy, rail, telecommunications, pipeline construction and housing infrastructure.

Fourie says the infrastructure division currently makes up 10% of Raubex’s revenue, with the short-term aim to achieve a R1-billion order book.

New on the horizon this year will be a possible acquisition in the materials space.

“We have signed a memorandum of under- standing and also await Competition Com-mission approval.”

Raubex reported a 14.6% increase in revenue to R3.22-billion for the six months ended August 31, compared with the same period last year.

Operating profit was, however, down 5.6% to R274.5 million, as an improved performance from the mining and commercial quarry operations was offset by continued challeng- ing conditions in the road construction industry.

The order book was at R6.2-billion, up from R5-billion in 2012.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

Comments

Showroom

Schauenburg SmartMine IoT
Schauenburg SmartMine IoT

SmartMine IoT has been developed with the mining industry in mind, to provides our customers with powerful business intelligence and data modelling...

VISIT SHOWROOM 
Alco-Safe
Alco-Safe

An unmanned breathalyser that is made to be tough and simple to use. Can be used in any environment for operator-free breathalyser testing.

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.106 0.155s - 150pq - 2rq
Subscribe Now