Raubex benefiting from diversity and better construction market
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Raubex Group expects headline earnings per share to be at least 100 percent higher in the six months to August 31 when compared with the comparative pre-Covid 19 period, and its order books are also at record levels.
The group, which has benefited from its diversified business model and increased tender activity in the construction sector, particularly in the materials supply operations, including aggregates, asphalt and bitumen, said also that the 117 cents per share headline earnings represented a turnaround from the 25.2c loss per share in the 2020 interim period, when its operations were severely impacted by pandemic lockdowns.
In the roads and earthworks division, a strong order book had been secured, supported by significant contract awards by the SA National Roads Agency Ltd (Sanral) at the end of 2020.
Work on all these projects had commenced and were progressing well.
“The group is encouraged by the current tender activity in the market and further contract awards are anticipated,” management said in a trading statement yesterday.
The EPC contract relating to the expansion, upgrading and improvement of the Beitbridge Border Post Project in Zimbabwe, awarded at the end of 2020, was also well under way, with construction on schedule.
The materials division, which contributed 67 percent of operating profit in the pre-Covid-19 comparative period, experienced stable operating conditions in the six months to August 31.
The infrastructure division experienced favourable conditions in the building sector and was well supported by the operations in Western Australia.
In the South African renewables sector, the delay in the start-up of the risk-mitigation IPP round of renewable energy projects impacted this division’s profitability.
The group said, however, this division was well-positioned to benefit from the roll out of Round 5 work related to the Renewable Energy Independent Power Producer Procurement Programme later in the year.
The balance sheet remained strong with a healthy cash balance throughout the period, which the group said put it in a good position to participate in the increased construction activity in South Africa.
Raubex’s share price traded up 1.56 percent to R29.36 yesterday morning. Over the year, the share price had increased steadily by more than 43 percent.