Raubex Group, the JSE-listed infrastructure development and construction materials supply company, celebrated its 50th year by lifting its interim dividend a sturdy 49.2% to 94 cents after strong financial performances from its diversified operations for the six months ended 21 August 2024.
Headline earnings a share increased 49.8% to 284.3 cents. Operating profit was up 34.7% to R846.2 million. Revenue increased 29.7% to R10.95 billion. Cash from operations surged 111.5% to R1.54bn.
Despite a share price dip of more than 5% to R44.93 yesterday, it remains 79.2% higher than the R25.02 it traded at a year ago.
“It is fitting that during this period of our 50th birthday, our share price also traded above R50 a share,” said CEO Felicia Msiza.
“Raubex’s results testify to the perseverance and resilience of the group as a diversified materials handling, mining, construction, and infrastructure company in Southern Africa and Western Australia.”
In an online interview, Msiza expressed optimism for second-half growth in line with the first half, noting that sentiment had improved considerably in the construction and engineering sector since the formation of the Government of National Unity.
“This is the space we want to be in,” she said.
Msiza described the interim results as “exceptional,” attributing them to their diversified business model first adopted about five years ago, which was now bearing fruit.
She said the order book declined marginally to R24.50bn, although the group continued to secure contracts during the period.
However, Msiza said they were “quite comfortable” with the order book level, emphasising that it was more important to secure new work of the right quality rather than simply growing the numbers.
Additionally, more road work was anticipated to become more available for tender before next March from the SA National Roads Authority, as well as additional work at the South African border posts.
Revenue increased due to strong performances across all divisions. The Moeijelijk mine faced some challenges, but the Materials Handling and Mining Division nevertheless delivered a solid performance.
Its revenue increased by 39.1% to R2.66bn, primarily due to increased production at Bauba’s Kookfontein mine. Operating profit increased 7.1% to R222.8m, with the secured order book at R4.79bn, (R5.05bn) as of August 31, 2024.
“The investment in Bauba continues to diversify group operations and earnings, and chrome ore demand remains favourable,” Msiza said, adding that chrome ore prices were stable.
The chrome ore wash plant and crushing circuit at Kookfontein mine had been contributing to higher revenue and profit since mid-July. A new PGM plant was expected to be commissioned in the first half of 2026.
Moeijelijk Mine switched to a new underground mining contractor to enhance safety. The initial start-up was slower than expected, the mine was “not out of the woods yet,” but daily production is now meeting set targets.
Revenue and operating profit for the construction materials division increased by 18% to R1.44bn and 97.3% to R122m, respectively, due to the execution of a strong order book. The order book was R1.43bn as of August 31 (R1.72bn).
The Roads and Earthworks Division lifted revenue 31.2% to R3.49bn, with operating profit also increasing by 74% to R257.3m, mainly due to a focus on executing its projects pipeline. The order book fell slightly by 3.1% to R9.84bn.
Infrastructure division revenue increased by 26.9% to R3.36bn, with operating profit up by 15.9% to R244.1m, boosted by new contracts in South Africa and solid results by Western Australia. The secured order book fell 2.1% to R8.44bn.
Revenue and operating profit for the Rest of Africa International segment increased by 54.5% to R698.1m and by 51.4% to R146.6m, respectively.
The 21% stake in the Senqu River Bridge joint venture project in Lesotho, which commenced at the beginning of 2023, was on schedule.
The Namdeb Project in Namibia, providing mining services to Southern Coastal Mines, was also progressing well, while the Bela-Bela quarry operation in Botswana performed “exceptionally well.”
As of August 31, 2024, the order book for the Rest of Africa fell 11.5% to R3.09bn.
Operations in Western Australia performed well, with revenue increasing 3.7% to R1.92bn and operating profit up 13.9% to R158.3m. The secured order book increased by 38.2% to R2.19bn.
BUSINESS REPORT