Raubex’s operating profit rise 10,6% to R440m in the six months to August, with the road construction earnings up 10,2% to 159,4c compared to the first half.

Strong government infrastructure spend saw Raubex Group’s operating profit rise 10,6% to R440m in the six months to August, with the road construction group’s headline earnings per share up 10,2% to 159,4c compared to the first half.

In an interim results statement, Raubex Group predicted “a strong performance in the second half” after reporting first-half revenues of R2,27bn, a rise of 1,8% from the corresponding period last year.

Declaring an interim dividend of 35c per share, Raubex reported a “stable” order book of R5,2bn, up from R4,9bn in the first half.

Profit before tax increased 11,4% to R429m from the corresponding period last year, with the group’s operating margin up from 17,8% in the first half to 19,4%.

Francois Diedrechsen, financial and commercial director of Raubex, said: “It’s a pleasing set of results — the world’s been in a fairly difficult period over the last six months, but we’ve still managed to achieve double-digit growth. We primarily operate in road infrastructure, which is government-driven business, so our exposure to the private sector is reasonably small, which has stood us well.”

Raubex’s road rehabilitation division, Roadmac, recorded a 19,9% fall in turnover to R944m from the first half, although it remained the largest contributor to group revenues. The division’s operating profit decreased 9,8% from the first half to R198,2m.

Raubex blamed the decline on “a change in the segmental mix as Roadmac’s resources are being deployed on various contracts in Namibia and Zambia, increased competition resulting in a lower rate of tender successes … as well as the effect of rise and fall clauses as declining input costs were passed on to the clients.”

Diedrechsen said “40% of Roadmac’s costs are oil price- related; a lot of the tenders we reported on were when oil prices were much higher, before the subsequent deflationary period”.

He also cited the appreciation of the rand against the Zambian currency, the kwacha, as affecting the group’s cash flow.

The statement said “in order to secure new work locally, current operating margins in the Roadmac and Raubex divisions will continue to be adjusted to account for the increased competition, particularly in the light road surfacing sector”.

Buildmax reported headline earnings per share (HEPS) of 3.7c for the six months ended August 31, against 9.5c earlier.

Opencast coal mining contractor and supplier of construction materials Buildmax on Monday reported headline earnings per share (HEPS) of 3.7 cents for the six months ended August 31, against 9.5 cents earlier.

Core HEPS of 4.5 cents were reported, from 10.6 cents previously.

Earnings per share (EPS) of 3.2 cents was 70% lower than the pro forma historical EPS of 10.5 cents.

Revenue increased to R957.3 million, from R845.7 million earlier.

Operating profit (EBIDTA) was at R186.8 million, from R255.2 million earlier.

Buildmax said that cash generated from operations of R242 million was 15% higher than the cash generated from operations in the comparative period of R211 million.

In line with group strategy, capital expenditure of R122 million was incurred for the interim period, compared with R323 million in the comparative period, Buildmax said.

Mining Services delivered revenue growth of 27%, but was unable to convert the higher revenue into increased profits, it said.

"The loss in revenue due to the industrial action and the downtime in July approximated R95 million, while fixed costs remained ongoing and additional HR costs were incurred.

"Construction Materials reported a decrease in revenue of 16% primarily due to the severe decline in the residential sector," Buildmax said.

"Compared to the prior interim period the international and local business environment has deteriorated significantly which, combined with industrial action at Diesel Power Open Cast Mining ("Diesel Power"), the group's largest subsidiary, negatively impacted Buildmax's results," the group said.

Looking ahead, it said that trading conditions remained challenging.

"Provided there is no further deterioration in the local and international economic environment and absenting abnormally high rainfall the group is optimistic that the results for the second half of the year will be stronger than for the first half," it concluded.