Raubex's share price surged by almost five percent yesterday as it announced a bumper interim dividend, up nearly 13%, boosted by increased activity on SA National Roads Agency (Sanral) projects in KwaZulu-Natal as well as the Beitbridge Border Post project.
The share price traded at R31.20.
In its interim results for the six months ended August 31 this year, the infrastructure development and construction supplier declared an interim dividend of 53c per share, from 47c per share for the prior corresponding period.
Chief executive Felicia Msiza said: “Our teams navigated tough macro-economic and inflationary pressures as well as supply chain constraints to achieve a pleasing group performance, supported by all four divisions."
Revenue was 23.2% higher at R7.38 billion, supported mainly by increased activity on the Sanral projects in KwaZulu-Natal, the Beitbridge Border Post project and recently acquired Bauba Resources.
Operating profit increased 26.4% to R550.3 million, and the group operating margin was 7.5% compared to the first half of 2022, which was 7.3%, with the main contributors to the increase being the Beitbridge Border Post project and Bauba.
Profit before tax increased 24.8% to R525.4m. Earnings per share were 15.1% higher at 161.8 cents, and headline earnings per share increased 16.1% to 159.0 cents.
In the construction division, the group said the commercial quarry operations in South Africa performed well with increased volumes in the northern and southern regions and delivered strong operating cash flows despite the lower margins.
"The Transkei quarry operations returned to profitability following the completion of the plant upgrade in Mthatha in March this year. Quarry operations in Botswana were challenged by margin pressures and lower sales volumes in the region due to a slowdown in demand and increased competition," it said.
In the roads and earthworks segment, it said most of the major Sanral projects in KZN were running at full capacity and were performing well.
The infrastructure division was affected by the continuing global economic conditions, which continued to place pressure on margins in the commercial building and housing operation.
"However, the secured order book is encouraging, with several new projects awarded for housing developments in the Orlando and New Modder (Benoni) areas. Residential development projects in Gauteng and the Western Cape are progressing well, and the focus remains on affordable housing projects given the current economic climate," the group said.
The order book was slightly lower at R16.4bn, from R17.1bn.
The division’s results were supported by a strong performance from the operations in Western Australia as well as the upgrade and expansion of the Beitbridge Border Post in Zimbabwe, a project the division jointly participates in,.
"Revenue for the division increased 9.5% to R2.16bn, and operating profit rose to R206.3m while the operating profit margin was 9.6%. The division incurred capital expenditure of R51.2m during the period, and has a secured order book of R5.30bn," it said.
Looking ahead, Raubex said the mining division would continue to pursue strategic partnerships with mineral resource owners to afford the group the opportunity to participate in various materials handling and processing opportunities over the medium and long term
In the roads and earthworks division the current tender activity in the market remained encouraging, while numerous contract opportunities, which had been tendered by the group, were still pending adjudication
The Infrastructure division was well positioned to take advantage of the private sector and the government’s drive to increase power generation capacity.
BUSINESS REPORT