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

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

He was hopeful that tolling would start in the next six months, but noted that this hope had been dashed often over the past few years.

One other factor that could also potentially boost the local road-building sector, was the push for Sanral to take over the responsibility 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, as there were simply too many companies competing for a limited number of contracts. The number of tenders had remained the same in recent years, said Fourie, but the number of competitors had soared.

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

Fourie expected 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 company’s 18-month-old infrastructure business, which reported a R882.3-million order book on Monday.

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

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

New on the horizon this year would be a possible acquisition in the materials space, he added.

“We have signed a memorandum of understanding, and also await Competition Commission approval.”

Raubex had an integrated model, in that it supplied every aspect of road construction, from stone to bitumen to a completed freeway.

Raubex on Monday 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 had been offset by continued challenging conditions in the road construction industry.

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

Raubex declared an interim dividend of 30c a share.