Construction tenders deliver multibillion rand revenue for Raubex

JSE-listed Raubex Group reported double-digit revenue growth for the six months ended August 31 2026, supported by strong performances in roads, infrastructure and Australian operations, while a sharply larger order book underpinned confidence in future earnings despite pressure from its mining interests.

The construction and infrastructure group said revenue increased 11.8% to R12.12 billion, while operating profit rose 2.5% to R618 million. Earnings per share climbed 8.8% to 266.9 cents and headline earnings per share increased 4.4% to 254.3 cents.

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The South African group operates through five primary divisions: materials handling and mining, construction materials, roads and earthworks, infrastructure, and Australia.

Its activities span road construction and rehabilitation, aggregates and asphalt production, bitumen products, renewable energy infrastructure, telecommunications, housing developments, mining services and

One of the standout metrics was cash generation. Cash generated from operations more than doubled to R1.56 billion, while the group maintained cash and cash equivalents of R1.89 billion and reduced borrowings by 12.4% to R2.40 billion.

Raubex also increased its interim dividend by 8.6% to 88 cents per share, reflecting management’s confidence in the group’s financial position and future workload.

The group’s secured order book expanded 24% from year-end levels to R39 billion, providing visibility across several years of infrastructure, mining and energy-related projects.

Roads and earthworks remained the largest contributor by revenue, generating R4.26 billion, while infrastructure contributed R1.81 billion, materials handling and mining generated R2.28 billion, construction materials produced R2.19 billion, and Australian operations delivered R1.59 billion.

Management said recent SA National Road Agency Limited’s project awards worth about R1.54 billion indicate renewed procurement momentum in the country’s road sector. Major projects already underway include the R3.22 billion N2 upgrade between Bloemendal and Piet Retief and a R2.36 billion N2 improvement project between Verzameling and Leiden.

The company also reported growing opportunities from toll-road concessionaires including N3TC, Bakwena and TRAC, alongside public-private partnership projects such as the proposed Lebombo Border Post development.

The main drag on group profitability came from the materials handling and mining division, where revenue increased 27% to R2.28 billion but the business moved to an operating loss of R111.1 million from a profit of R87.7 million a year earlier.

The deterioration stemmed largely from the performance of Bauba Resources, where higher logistics, freight and diesel costs linked to geopolitical tensions in the Middle East eroded margins. Bauba’s operating loss widened significantly despite a strong increase in sales following commissioning of a platinum group metals plant.

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In a significant strategic development, Raubex disclosed that it is pursuing a potential disposal of its entire interest in Bauba Resources as part of a review aimed at sharpening focus on core infrastructure operations and improving capital allocation. The company, however, cautioned that no transaction is certain at this stage.

Another major development was the award to B&E International of a R5.8 billion five-year operate-and-maintain contract for Vedanta Zinc International’s new lead-zinc concentrate plant in the Northern Cape, with earnings contributions expected from the financial year 2028 onwards.

The Infrastructure division reported a 33.8% increase in its order book to R9.99 billion, driven by renewable energy, building and civil engineering opportunities.

Projects advancing through the division include a R2.4 billion cluster of three wind farms near Murraysburg, a newly awarded 250MW photovoltaic facility near Beaufort West, ongoing repairs to Parliament in Cape Town and participation in the Potsdam Wastewater Treatment Plant upgrade.

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Raubex also secured preferred bidder status for the Lebombo Border Post redevelopment and won a R770.7 million civil works subcontract for the Gautrain Rapid Rail Link System, further broadening its infrastructure portfolio beyond roads.

Australia delivered one of the strongest turnarounds in the group. The division swung from an operating loss of R94.8 million in the comparable period to an operating profit of R145.1 million, while its order book surged 69.1% to R3.27 billion.

“The Group’s balance sheet and cash position remain robust with healthy cash generated from operations. The solid order book of R39.00 billion … reinforces confidence in the Group’s future growth prospects.”

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