Buoyed by an 11.6% surge in its order book, Raubex is eyeing opportunities in the infrastructure-poor Africa and public-private partnerships in South Africa, the group’s main cash cow.
The group on Monday said its order book increased from R28.18bn to R31.46bn, providing the group with earnings visibility to stakeholders.
Felicia Msiza, CEO of Raubex, said the group’s diversification strategy remains a defining pillar of the company’s success.
“By broadening our operational footprint and building a resilient, future‑focused business model, we have unlocked sustained growth opportunities,” Msiza said.
“This achievement is made possible by the unwavering dedication of our workforce, whose passion and professionalism continue to set us apart, and by the steady leadership and strategic insight of our management team, whose guidance has driven the group to reach significant milestones.”
The group’s share price has surged 107% over the past three years, with the construction major worth about R9.6bn on the JSE.
Raubex’s revenue increased 4.6% to R22bn in the year ended February and operating profit rose 11.6% to R1.74bn.
The group’s infrastructure division had a stellar year with revenue up 30.2% to R4.35bn, lifting operating profit by 42.2% to R426.9m.
“The infrastructure division continues to face a favourable outlook supported by a strong order book,” the group said.
“Significant opportunities continue to emerge in the public-private partnership (PPP) environment, where these collaborations allow the government to draw on private-sector expertise to advance and develop infrastructure projects.”
Operating profit of the construction materials franchise fell 13.4% to R312.5m, while profit of the group’s biggest division, the roads and earthworks business, rose 4.3% to R612.7m.
The company’s Australian business had a difficult year, swinging from a profit of R303m in the previous year to an operating loss of R60.4m.
Raubex warned of surging costs due to war in the Middle East.
“The construction phase of large-scale infrastructure projects is typically diesel intensive and ongoing geopolitical tensions in the Middle East may place pressure on project margins as increases in diesel prices cannot always be fully recovered.”
Clairize Malan, senior associate at MDA Attorneys, said that due to the diesel price surge construction contractors are running out of time to recover additional costs.
“Diesel has jumped in a short time. For contractors running plant-heavy operations, that is a material hit to the bottom line. Most standard contracts were simply not designed to assist contractors in absorbing a shock of this magnitude,” Malan said.
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