Raubex secures energy projects

Listed infrastructure development group Raubex has secured wind and solar projects worth R500m that are part of SA’s Renewable Energy Independent Power Producer Procurement programme. The new work will soften the blow of the dearth of road construction projects amid a declining order book, especially from Sanral.

Listed infrastructure development group Raubex has secured wind and solar projects worth R500m that are part of SA’s Renewable Energy Independent Power Producer Procurement (REIPPP) programme.

The new work will soften the blow of the dearth of road construction projects amid a declining order book, especially from the SA National Roads Agency (Sanral). In the year to February 28, the order book from Sanral, which historically accounted for about 25% of orders, fell to 12%. The Sanral tenders dropped 46.8% to R962m.

Speaking after the release of results for the six months ended August 31, in which the two divisions reported huge decreases in revenue, CEO Rudolf Fourie said on Monday that the group has secured the R500m civil works contracts and is in negotiations for additional work, also worth R500m.

He said the company is a subcontractor for the Droogfontein solar photovoltaic power project in the Northern Cape and the Copperton wind farm, also in the Northern Cape.

Raubex’s REIPP contracts will ease the pressure on the group’s underperforming road construction divisions.

Fourie said the company continued to experience difficult conditions in the road construction sector, “where low volume work experienced during the first half of the year has resulted in the group s asphalt and bitumen supply operations being right-sized in order to adjust to the current level of demand”.

The “right-sizing” resulted in the retrenchment of 280 employees in the road surfacing and rehabilitation business and cost the company R13m. Raubex also retrenched 29 employees in the road construction and earthworks business at a cost of R1.8m. The infrastructure business retrenched 32 employees, incurring R600,000 in costs.

Raubex’s revenue decreased 4% to R4.5bn, while operating profit fell 57.4% to R157.8m.

Earnings per share decreased 73.4% to 35.7c and headline earnings dropped 72.8% to 35.7c. The company declared an interim dividend of 12c, down from 45c in the corresponding period last year.

4% the decline in Raubex’s revenue, while operating profit declined 57.4% in the six months to the end of August