Infrastructure development group Raubex achieved a consistent performance in the six months to August 31, despite challenging industry conditions and the impacts of unplanned refinery shutdowns on the company’s asphalt operations, CEO  Rudolph Fourie said.

The company increased its earnings a share by 4.3% year-on-year to 108c, while headline earnings a share rose 5.3% year-on-year to 107c.

Revenue was 4.3% higher R3.89-billion and operating profit 9.5% higher at R329.3-million.

The results were supported by a strong performance from the group’s materials and construction divisions. 

Fourie said the materials division continued to perform strongly during the period and, through the acquisition of Belabela Quarries, Raubex established a presence from which to grow in Botswana.

“Our order book is solid and we anticipate an improved performance in the second half of the year, supported by the materials division, a stabilised asphalt production environment and the execution of various solar projects,” he noted.

Group operating margin increased to 8.5%, while net finance costs increased to R26-million owing to an increase in interest-bearing borrowings and slightly lower cash balances during the period. Total noncash finance costs amounted to R2-million for the period.

Construction contracts in progress increased by 11.8% to R423.4-million owing to the company’s work on solar energy projects where billing was based on the achievement of milestones as opposed to percentage completion.

Trade and other payables decreased from 5.9% to R1.24-billion and borrowings increased by 45.3% to R1.07-billion owing to the financing of plant and equipment for the Tschudi copper mine project, in Namibia, and the Buildmax and Prodev assets acquired in the second half of the prior year.

Capital expenditure on property, plant and equipment increased to R278.5-million and was mainly related to the replacement of assets to maintain current operations.
The group’s net cash outflow for the period was R147.3-million with total cash and cash equivalents at the end of the period of R789.5-million.                             

Inventories increased from 2.8% to R552.7-while trade and other receivables increased by 23.9 % to R1.51-billion owing to the inclusion of a purpose built plant for mining clients, accounted for as receivables under finance leases and payments due from the Zambia Road Development Agency on the Link 8000 contracts.  

The Medium Term Budget Policy Statement presented to Parliament in October proposed baseline increases to the South African National Road Agency Limited’s budget over the Medium Term Expenditure Framework period to arrest deterioration of the national road network.

To improve the efficiency of investments in the secondary road network, a new performance component incorporating efficiency indicators for managing road networks was proposed and would be introduced in the provincial roads maintenance grant.

“These proposals are encouraging and should ensure that a healthy volume of road construction and rehabilitation work is available for tender in the medium term.”

Raubex had a secured order book of R8.24-billion and would use this base to continue focusing on the effective execution of current contracts and selective tendering for replacement work at better margins.

The Zambia Link 8000 contracts accounted for R975-million of the current order book.

The outlook for commercial quarrying operations and material handling and processing operations remained positive and the group would continue to look for acquisitions in the materials sector to expand its geographical footprint.