Raubex reports a likely decline in headline but the second half looks better

Raubex, the JSE-listed infrastructure development group, warned Thursday its headline earnings per share (HEPS) will be between 10% - 20% lower for the six months to August 31 compared with the same period last year.

While this will translate in HEPS of between 227.4 cents and 255.9 cents, a decline in performance, the group’s management say they remain focused on long-term value creation, underpinned by a resilient business model and a clear strategic direction.

“Despite the challenges during the first six months, the group remains confident about the outlook for the remainder of the financial year and the years ahead,” Raubex's directors said. The group also held a record order book.

“We continue to see significant opportunities to further grow the order book, supported by positive developments in the South African construction market and various government and Public Private Partnership infrastructure initiatives. Our diversification strategy has remained a fundamental driver of the group performance,” they said.

The Roads and Earthworks Division saw a strong performance, with an increase in operating profit primarily attributable to the effective execution of the division's project pipeline.

“Major SANRAL projects are operating at full capacity and performing exceptionally well,” the management said.

Two significant contracts were secured recently: the R3.22bn contract to upgrade the N2 route between Mkhondo and Bloemendal; and the R2.36bn contract for improvements along the N2 between Ermelo and Camden. These new projects replaced completed work along the KwaZulu-Natal corridor of the N3.

The Construction Materials Division experienced a slower start, mainly due to bad weather conditions in March and April 2023, which impacted operations.

The Aggregates business recorded lower-than-anticipated volumes. However, performance had begun to improve in line with better market conditions.

Recently commissioned plant upgrades in Gauteng were exceeding expectations, significantly improving both output and operational efficiency.

Operations in Botswana performed well and continue to contribute positively to divisional results. Recent contract at National Asphalt awards had “significantly strengthened the pipeline,” and a strong performance is anticipated for the remainder of the year.

Tosas delivered a robust performance. The industrial minerals segment was adversely affected by uncertainty surrounding the future of smelters in South Africa, resulting in lower bentonite sales.

The agriculture segment benefited from a favourable rainy season, which led to a substantial increase in gypsum sales. These gains offset the decline in bentonite sales.

In the infrastructure division, the focus on privately-owned renewable energy projects began to yield positive results with a substantial increase in operating profit.

The repair and upgrade of the Parliament buildings in Cape Town was progressing well.

The affordable housing projects continue to develop well. “Sales in the Newinbosch development are outperforming expectations, reflecting growing market confidence. With a noticeable uptick in property activity, the outlook for 2026 remains positive,” the group said.

The design and build of the mechanical and electrical works for the upgrade of the Potsdam Wastewater Treatment Plant is ongoing and the project is on schedule.

The Materials Handling and Mining Division is expected to report a decline in operating profit.  A recovery in chrome pricing enabled mining operations to achieve break-even performance for the current six-month period.

At Kookfontein, production was scaled back at the end of last year but successfully ramped up to full capacity towards the latter part of the reporting period.

The PGM plant at Kookfontein was successfully commissioned, with the first full month of production in August 2025. PGM sales were anticipated to commence in the second half.

At Moeijelijk mine, a new underground contractor began operations in April 2025, and had been performing in line with production targets.

Management was evaluating the long-term strategic direction of Bauba. B&E International delivered a solid performance, supported by several start-up contracts. The Australia division expected to report an operating loss, primarily due to a single underperforming project.

Raubex Construction Australia encountered challenges on its largest active project, which was terminated for convenience at the end of September 2025. The resulting financial impact, a loss of about R210m, would be recognised in the first half. Raubex Construction Australia's other projects were profitable.