Raubex CEO Felicia Msiza says the diversified construction and engineering group’s record-high order book of R20bn is poised for even more growth, with the company hoping to win more state contracts.
Raubex reported a 36.9% increase in profit to R858.6m in the year to end-February, while revenue increased almost a third to more than R15.3bn, resulting in the board’s raising its final dividend 40% to 76c per share.
Speaking to shareholders and analysts in her debut full-year results presentation on Monday, Msiza said Raubex was confident it could bag more work for its four divisions, with a focus on its infrastructure division.
“We have experienced high tender activity during the year in review and there are a number of projects still pending adjudication, which could substantially increase the order book if awarded,” said the CEO.
During the year in review, Raubex saw the completion of its flagship Beitbridge border project, the reception of the first full-year contribution of chrome producer Bauba Resources, its Sanral projects in KwaZulu-Natal and its diversification into Australia.
In April, the company said it was awarded Sanral contracts to the value of about R2bn since October.
“On the SA border posts, we know that the government is working on those and we are preparing in terms of responding to those and in terms of our experience (at Beitbridge) we believe we are well positioned to execute those,” said Msiza.
Without giving away much detail, she added that Raubex would selectively target public-private-partnership (PPP) project opportunities and would use its Beitbridge experience to be able to execute.
After acquiring a controlling stake in Bauba Resources in 2022 — a diversified mining and exploration group — Raubex now reports on four operating divisions, up from three including construction materials, infrastructure, roads and earthworks and materials handling and mining.
The biggest segment by operating profit was infrastructure (40.4%) followed by roads and earthworks (40%). The materials handling and mining segment was third (13.2%) and the rest from construction materials.
Most operating profits of the Centurion-based firm were generated in the rest of Africa, then SA and Australia.
Headline earnings per share, a common profit measure for SA companies, improved by almost one-third to 392.8c and earnings per share by 27.4% to 391.1c.
In terms of cash flow, net cash generated from operating activities almost close to tripled to R1.6bn.
Msiza said the infrastructure segment — which specialises in disciplines outside the road construction sector, including energy, facilities management, telecommunications, housing infrastructure projects and commercial building refurbishment — was poised to benefit from the uptick in demand for renewable energy.
“We want to grow our market share in the renewable sector in both the public and private renewable sectors, both locally and internationally,” she said. “With regards to renewables, there has been activity from the private side. We have submitted our bids in that space and we have signed with a private client.”
The division recently signed its first wind farm renewable project since 2021 with a private client to the value of about R2.1bn, pending financial close.
As the R4.3bn JSE-listed Raubex makes a play out of the opportunity presented by SA’s power inadequacies, the group reported that it had not emerged unscathed by the effects of load-shedding.
Msiza said the energy crisis in SA had negatively affected the construction materials division, saying while it was not easy to quantify the total cost, “we can see the impact on the bottom line,” adding that management was working on a host of mitigation strategies in the meantime.
Additionally, the company reported that work in Mozambique, which was suspended in the previous financial year due to the terrorist insurgency, remained suspended throughout the current year.
Raubex said that in the light of the continued uncertainty in Mozambique, it made a decision to write down the full stockpile at Pemba in February to the value of R50.4m.
The 49-year-old infrastructure development and construction material supply group counts the Public Investment Company, Old Mutual and PSG Asset Management among some of its largest shareholders.
Raubex shares rose 3.44% to R24.99 on Monday, having fallen over 12% since the start of 2023.
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