Raubex grows interim revenue and profit, declares dividend

JSE-listed construction materials and mining company Raubex has increased its revenue by 29.7% to R10.95-billion for the half-year period to end August, up from R8.45-billion in the comparable period of the prior financial year.

The group also increased its operating profit by 34.7% to R846.2-million during the half-year, up from R628.4-million in its prior financial year's interim reporting period. The group operating margin improved to a satisfying 7.7%, up from 7.4% in the 2024 half-year period.

Despite the challenges experienced at the Moeijelijk mine, the Materials Handling and Mining division delivered a solid performance, the company says in its results statement.

Raubex declared an interim dividend of 94c a share, up from the 63c-a-share interim dividend declared for the prior financial year's half-year period.

Earnings a share increased by 48.2% to R2.86 a share, compared with R1.93 a share in the half-year period in its 2024 financial year. Headline earnings a share increased by 49.8% to R2.84 a share, up from R1.89 a share in the prior financial year's interim period.

Further, cash generated from operations increased by 111.5% to R1.54-billion, compared with R728.3-million in the prior financial year's half-year period.

The group also increased net asset value to R6.92-billion during the interim reporting period, up from R6.61-billion achieved at the end of its 2024 financial year.

"Despite the challenges experienced at the Moeijelijk mine, the Materials Handling and Mining division delivered a solid performance," Raubex says.

Further, capital expenditure (capex) fell to R757.6-million, down from R997.4-million in the 2024 interim period.

The decrease is attributable to lower capex compared to the prior period, which included the mining expansion cost at the Bauba mines as well as the Namdeb contract.

"The current period’s capex includes expansion at Bauba of R176.6-million, the capitalisation of mine infrastructure development and stripping costs of R109.3-million and plant upgrades in the Construction Materials division of R58.2-million," the company says.

Further, the group's order book fell to R24.5-billion, down from an order book of R25.5-billion at the end of its 2024 financial year, it says.

Borrowings increased by 11.8% to R1.92-billion, up from R1.72-billion in the 2024 interim period, largely owing to the plant expansions at Bauba, and an increase in mortgage bonds to finance building developments of R120.5-million.

Net finance costs increased by 3.5% to R31.1-million, up from R30-million in the first-half of its 2024 financial year.

Finance costs on bank borrowings increased by 49.7% to R82.5-million, up from R55.1-million in the 2024 interim period.

DIVISIONAL RESULTS
Raubex's Materials Handling and Mining division increased revenue by 39.1% to R2.66-billion, up from R1.92-billion achieved during the half-year period in its prior financial year. The main reason is the increased sales volumes at Bauba’s Kookfontein mine.

Divisional operating profit rose by 7.1% to R222.8-million, with the operating profit margin decreasing to 8.4%, down 10.9% in the 2024 interim reporting period.

"The investment in Bauba continues to diversify the group’s operations and earnings as the demand for chrome ore remains favourable. Despite the strengthening of the rand to the dollar, the chrome ore prices remained stable during the period under review," the company notes in its results.

The successful commissioning of the chrome ore wash plant and crushing circuit at Kookfontein mine contributed to the increase in revenue and profit.

The decrease in profit margin was mainly owing to increased costs through processing run-of-mine, together with higher fixed costs per tonne, lower product grades and lower yields while the processing plants were ramping up during this commissioning period.

Since mid-July, the plant has consistently operated at designed feed capacity. The mine has commenced with the construction of a platinum group metals plant and the expected commission date is the first half of its 2026 financial year.

Further, Moeijelijk mine switched to a new underground mining contractor at the start of the financial year. Although this change was expensive, it was necessary to enhance safety and to employ a contractor with greater expertise in bord and pillar mining.

The initial startup phase progressed slower than expected, but current daily production is meeting the set targets.

Changes at both operations were disruptive but necessary to increase Bauba’s profitability in the long term, Raubex adds.

The Materials Handling and Mining division's capex decreased by 50.8% to R360-million. The reduction is attributable to the large capex spent in the first half of its 2024 financial year that related to the expansion of Bauba’s operations, as well as the commencement of the Namdeb contract.

Additionally, B&E International continues to perform very well, mainly owing to its flagship Namdeb five-year contract. The Namdeb contract provides mining services to Southern Coastal Mines in Namibia and is currently ahead of schedule.

There has been a notable increase in the award of tenders, which in turn increases the demand for contract crushing for the construction sector, the company adds.

Operational challenges were faced by SPH's Kundalila Northern Cape operations, and these operations were streamlined to reduce their cost base. SPH's Saldanha operations were negatively impacted by the severe weather conditions experienced during the period under review.

"The collaboration opportunities between the group’s four divisions provide opportunities for Raubex, particularly concerning Bauba’s operations.

"At Bauba’s Kookfontein openpit mine, the mining equipment is managed by SPH, while materials processing is handled by B&E International at the Moeijelijk and Kookfontein mines.

"Raubex Construction has concluded the construction of a tailings storage facility at the Kookfontein mine during the second half of the 2024 financial year. Raubex, through its subsidiaries, will continue to focus on further developing investment opportunities.

"The force majeure restrictions imposed on operations in Mozambique owing to political instability are still in place and uncertainty remains on when these will be lifted," it adds.

Further, the OMV gypsum, aggregates, and ready-mix operations performed well, benefiting from the overall improvement in the construction industry. Additionally, the project supplying aggregates and ready-mix to the Kareerand tailings storage facility is meeting expectations.

Meanwhile, OMV’s investment in Attaclay, which is a bentonite mine in Steelpoort, delivered strong results owing to increased production to meet the rising demand for bentonite. This mineral is crucial for constructing tailing facilities and is also used in smelter furnaces.

To accommodate higher demand, an additional bentonite mill was successfully established in Olifantsfontein.

OMV’s industrial minerals operations also performed well during the period under review, Raubex says.

"We are very proud of these sterling results, which are a testimony to the perseverance and resilience of the group as a diversified materials handling, mining, construction, and infrastructure company with a presence in Southern Africa and Western Australia," says Raubex Group CEO Felicia Msiza.

"The group is optimistic about the 2025 financial year outlook, particularly for our South African operations, buoyed by positive market sentiment and anticipated economic growth.

"With a robust tender pipeline for the remainder of the year, Raubex is well-positioned to capitalise on upcoming tender awards, further bolstering our secured order book," she says.