Raubex's interim performance: A mixed outlook with a solid order book

Raubex Group experienced "a few isolated challenges" in the six months to August 31 that led to headline earnings falling 14% to R245.3 cents a share, but the order book and balance sheet are healthy, underscoring a positive outlook.

This follows a revenue decrease of 1% to R10.84 billion. Operating profit decreased by 28.7% to R603 million. Cash generated from operations decreased by 50.5% to R762.4m. The order book stood at R30.44bn (up from R28.18bn). The interim dividend came to 81 cents a share from 94 cents per share at the same time last year.

"While the performance reflects a decline, the group remains focused on long-term value creation, underpinned by a resilient business model and a clear strategic direction. The solid order book of R30.44 billion, an increase of 8% since the last year-end, reinforces confidence in the future growth prospects,” said CEO Felicia Msiza.

She stated in an online interview that the diversification strategy was a fundamental driver of the group’s performance. Despite certain divisions encountering various operational and trading challenges during the period, the results were regarded as solid, she said.

“We have reinforced our presence across multiple sectors and unlocked pathways for long-term growth,” she added. The roads and earthworks division had an “excellent” first half, and there had been a “stellar” performance in the infrastructure division, she said.

Borrowings increased by 10.7% to R2.51bn, mainly due to the Axis Group acquisition, which added R255.4m to borrowings. The debt-to-equity ratio was 34.2% compared to 31.7% at the last year-end.

The material handling and mining division’s operating profit fell by 50%. Msiza said that Bauba, in the division, reported a R7.6m operating loss, which was a marked improvement on the R350.5m operating loss in the second half of 2025. There were lower mining volumes and grades despite an increase in the chrome ore concentrate price.

The new PGM plant at Kookfontein, commissioned in August 2025, was expected to increase profitability. The Naboom chrome resource should start contributing to Bauba’s earnings from the second half.

Operating profit in the construction materials division fell by 14.8%, mainly due to adverse weather in the first two months of the period, resulting in lower asphalt and bitumen sales volumes; as well as the impact on the industrial minerals business from the uncertainty surrounding the future of ferrochrome smelters in South Africa.

This uncertainty had resulted in lower bentonite sales, but this was offset by higher gypsum sales. If the ferrochrome smelter sector goes back online, the group would thus be in an opportune position, said Msiza.

The infrastructure division's operating profit increased by 110.6%, mainly attributable to new contracts secured in South Africa. The secured order book decreased by 17.4% to R6.07bn.

The division benefited from work at renewable energy projects - the largest of these is a R2.4bn cluster of three wind farms near Murraysburg in the Western Cape, as well as several Solar PV projects in the Northern Cape. Raubex was awarded preferred bidder status for the Lebombo Border Post project. Several PPP (public-private-partnerships) proposals and the group was optimistic about their outcomes.

Operating profit in Australia fell by 159.9%. Losses on one contract - while the other contracts were performing well - were fully written down in the first half, said Msiza.

The outlook for Western Australia has shifted to cautiously optimistic. New project activity is expected to remain subdued, but several tenders have been submitted. Additionally, Axis Mineral Services was expected to make a positive contribution to the division’s full-year results, said Msiza

BUSINESS REPORT