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Raubex posts good full-year results amid higher infrastructure spend by govt

16th May 2022

By: Marleny Arnoldi

Deputy Editor Online

     

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JSE-listed construction and engineering company Raubex posted a 159% year-on-year increase in its operating profit to R945-million for the financial year ended February 28.

The group posted a R364-million operating profit in the year ended February 28, 2021.

Raubex declared a final dividend of 54c apiece for the year under review, against a 29c dividend in the prior year.

The company’s order book stands at R17.13-billion.

Headline earnings a share increased by 263% year-on-year to 205.9c, while net asset value increased to R5.22-billion, from R4.67-billion in the prior year.

CEO Rudolf Fourie says the year’s performance was supported by all three divisions of the group, as well as the higher level of government spend on infrastructure in South Africa.

The group itself spent more this year, with capital expenditure on property, plant and equipment increasing by 66% year-on-year to R695-million, largely owing to the cash preservation measures that were implemented in the prior financial year, as a result of Covid-19 uncertainties.

Raubex had cash and cash equivalents of R1.5-billion at the end of the financial year.

Fourie explains that the commercial quarry operations, in the Materials division, performed on par with last year and a major plant upgrade will see benefits in production coming through in the 2023 financial year.

He adds that contract crushing operations for the construction sector continue to experience weak demand.

The materials handling operations, also part of the Materials division, had a steady performance in the year under review.

The division has a secured order book of R2.3-billion.

The Roads and Earthworks division enjoyed projects by the South African National Roads Agency running at full capacity in the year under review. The division was supported by various concession projects throughout South Africa.

Fourie notes that demand for asphalt products slowed down in the second half of the financial year, but Raubex saw increased demand for bitumen, which helped to increase profitability in the division.

The Road and Earthworks order book stands at R10.2-billion.

The Infrastructure division reported a good performance from commercial building and housing operations.

In the renewable energy sector. Fourie mentions that the delays in bid awards related to the Risk Mitigation Independent Power Producer Procurement Programme, as well as the Renewable Energy Independent Power Producer Procurement Programme, did not have a material impact on the division’s results.

The Infrastructure division’s results were supported by operations in Western Australia and the expansion of the Beitbridge Border Post in Zimbabwe. The division’s order book stands at R4.6-billion.

In terms of the group’s international operations, which consist of materials supply and mining services, as well as construction activities, Raubex posted a healthy order book of R3.05-billion for Africa, and an operating profit increase to R288-million, compared with an operating loss of R12.8-million posted in this division the prior year.

Raubex remains well positioned to cater to new renewable energy builds in the country, as soon as they start to reach financial close later in the year.

The company says it will continue exploring opportunities to form strategic partnerships with resource owners in the mining sector, and further establish itself in the affordable housing and commercial building sector.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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