RAUBEX UNCERTAIN ABOUT SA CONSTRUCTION INDUSTRY’S FUTURE
Infrastructure development and construction materials group Raubex’s 2019 financial year was characterised by a lack of work, coupled with violent community unrest that affected several of its sites, CEO Rudolf Fourie said on Monday.
The company’s earnings a share for the year ended February 28 decreased by 86.3% year-on-year to 31.9c, while headline earnings a share decreased by 75.1% to 57c.
Revenue decreased by 0.3% year-on-year to R8.52-billion, while operating profit decreased by 69.2% to R207-million.
Profit before tax decreased by 71.8% to R180.7-million.
Despite the challenges, the materials division recorded stable results, with activities focused on materials handling and screening services provided to the mining industry, as well as commercial quarrying operations throughout Southern Africa, having supported the group’s earnings for the year.
This will continue to differentiate the group from the overall construction sector.
“Good progress has [also] been made in the affordable housing space where conditions are more favourable,” Fourie commented, adding that the company was also benefiting from its participation in projects selected under government’s Renewable Energy Independent Power Producer Procurement Programme, where a solid order book of work has been secured.
Commercial quarrying operations have experienced an overall increase in volumes of about 12% off a low base from the prior year, with site-specific pockets of improvement. However,
community unrest at certain sites and Eskom’s load-shedding have had a negative impact on
of activity in the overall construction sector.
Owing to the lower volume of work, the division embarked on rightsizing initiatives during the year to reduce excess capacity. The division has, however, retained some excess capacity in anticipation of an increase in public sector spend and said it would review its position and market conditions in the year ahead.
the year were also adversely affected by violent community unrest in certain areas which
impacted on production efficiencies.
Revenue for the division decreased by 20.7% to R3.63-billion and operating profit decreased by 184.9% to an operating loss of R245.8-million.
The divisional operating profit margin decreased to an operating loss margin of 6.8%, while the division incurred capex of R61-million during the year.
Further, the acquisition of Westforce Construction in Western Australia which was effective January 1, 2018, had delivered its first 12-month set of results post-acquisition and has contributed to the growth in this division.
Revenue for the division increased by 55.1% to R2.13-billion and operating profit increased by 488.5% to R94.3-million.
Internationally, revenue increased by 37.4% to R1.53-billion while operating profit decreased by 33% to R126.3-million. Operating profit margin decreased to 8.3%.
The group’s secured order book, therefore, decreased by 2.2% to just over R8-billion. Of the total order book, 14.1% represents contracts outside of South Africa in the rest of Africa and Western Australia.
challenging and the short-term outlook uncertain. https://www.engineeringnews.co.za/article/raubex-uncertain-about-south-african-construction-industrys-future-2019-05-13/rep_id:4136