Raubex to benefit from solid order book, healthy balance sheet
RAUBEX Group lifted its order book of infrastructure development and construction materials supplies by 27.5% to R25.55 billion in the year to February 29, which, with a strong balance sheet boded well for it to continue paying dividends, CEO Felicia Msiza said yesterday.
She said the annual results for the 50-year-old group to February 29 were good given the many challenges faced by the country, as well as the industries in which the group operates.
Major contributors to the performance were Bauba Resources and the Western Australia operations.
“Although we are cautiously optimistic as this is an election year, the growth in the secured order book to R25.55bn is indicative of future prospects. Our growth strategy is underpinned by our diversified business model, committed workforce, strength in leadership, and healthy balance sheet.”
Msiza said in an interview the performance was especially pleasing as the Beitbridge Border Post project was no longer included in the numbers, as it was completed in the prior financial year.
The group, however, was still doing maintenance at Beit Bridge, and it hoped to also in future be involved in work at another six other border posts, she said.
Revenue increased 13.8% to R17.43bn mainly as a result of the “very strong performance” of the materials handling and mining division, specifically Bauba Resources, as well as from Western Australia.
She said chrome mine Bauba performed well following capital expenditure injected into it, post Raubex’s acquisition of full control of Bauba in 2022. “We are starting to see the benefits of this now,” Msiza said.
Group operating profit increased 20.4% to R1.54bn.
The materials handling and mining division revenue rose 39.6% to R4.02bn, mainly due to improved production at Bauba, as a result of the Kookfontein mine’s north and south pit coming online at the start of the year.
Operating profit for the division increased 246.8% to R584.7m. As at February 29, the secured order book was R5.05bn up 38.2% from the previous year-end.
“Bauba’s acquisition of the 74% ownership of the Naboom Mining Company will increase the life of mine of the chrome and PGM operations,” said Msiza.
Revenue and operating profit for the construction materials division increased 29% to R2.42bn and 41.1% to R115m, respectively.
The operating profit margin increased to 4.8% (4.3%) despite rising fuel prices, high bitumen prices, and load shedding.
Strong operating cash flows were generated. The secured order book was R1.72bn up 71.7%.
Msiza said the level of contracts coming to the market generally was satisfactory, also in the roads division.
Revenue in the roads and earthworks division fell 6.1% to R5.67bn, mainly due to the Beit Bridge Border Post project completion. No profits from this project were thus included in the division’s results.
Operating profit fell by 35.1% to R331.5m. Excluding this from the previous year’s results, revenue and operating profit increased by 8% and 47.3%, respectively. The secured order book increased 30.2% to R10.16bn.
The solid performance by Western Australia was the main contributor to revenue growth for the infrastructure division. Revenue increased 17.8% to R5.32bn and operating profit fell slightly by 1.9% to R505.5m. The secured order book increased by 13.8% to R8.62bn.
Revenue and operating profit for the Rest of Africa segment fell by 49.8% to R996.8m and by 68.0% to R189.5m, respectively. The main reason was completion of the Beit Bridge Border Post project. The order book for Rest of Africa was at R3.49bn from R3.79bn.