Simon Mundy
10 November 2009
Johannesburg — 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 R2,27b n, 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 R5,2b n, up from R4,9b n 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".
Be the first to Write a Comment!
Copyright © 2009 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
