Raubex: Weak trading conditions knock second-half performance
WEAK TRADING conditions in the South African construction industry, particularly in the road construction sector, knocked the financial performance of listed Raubex in the second half of its financial year. During the second half of the financial year, particularly in the road construction sector.
The road construction and rehabilitation-focused company that is repositioning itself into a fully-fledged construction group yesterday reported that the weak trading conditions experienced impacted negatively on its subsidiaries operations and in the road rehabilitation and maintenance operations, which included the supply of asphalt and bitumen to the market.
Raubex said its headline earnings a share for the year to February were expected to be at least 20 percent lower than in the previous year.
It said this translated to headline earnings a share being at least 45.7 cents lower than the 228.6c achieved in the previous year.
When it released its interim results in October, Raubex reported that the company had gone through a process of right-sizing the affected subsidiaries during the first half of the financial year.
Raubex said yesterday that these right-sizing initiatives continued during the second half of the financial year to further reduce capacity in line with the current low level of demand being experienced. The company did not provide any indication of how many employees were impacted by the right-sizing initiatives.
Commenting on its divisions, Raubex reported that the materials division had experienced stable operating conditions during the current financial year and its diversified operations, including material handling services to the mining sector and commercial aggregate supply, had continued to support the company’s earnings.
The material division contributed 54.5 percent of total company operating profit in the previous year.
Raubex added that its infrastructure division had experienced favourable conditions in the affordable housing sector throughout the financial year and was also well positioned to benefit from the roll-out of work related to the Renewable Energy Independent Power Producer Procurement Programme (Reipppp).
It said a number of Reipppp contracts were being negotiated and three Reipppp contracts with a total value of R621 million had been secured during the year, with work commencing on these projects during the second half of the financial year.