Raubex (RBX) – Shifting focus

Raubex produced strong results in FY23, aided by Bauba and Beitbridge, which benefited from the weak rand and favourable commodity prices. Excluding Beitbridge, Raubex still performed well through its Roads & Earthworks division and its diversification strategy bore fruit through its Materials Handling & Mining division.

The core construction and materials businesses struggled over the period as activity in the sector remained low. Despite c. 32% growth in Roads & Earthworks, construction materials volumes, infrastructure contracting revenue and materials handling declined. Raubex has been disappointed by the lack of infrastructure expenditure from the government, issues at SANRAL and delays in public REIPPP awards, which slowed growth.

However, Raubex has shifted its focus and is reducing its reliance on the government for growth. It has invested R379m in mining assets and plans to spend a further R121m. This shift resulted in 53% y-y growth in the Materials Handling & Mining division. Due to the delays with BW 5, Raubex has shifted to private REIPPPs, where it is experiencing higher demand and less red tape. It has not abandoned public REIPPPs but will no longer rely on them.

At its core, Raubex is a road builder and will continue to work for and with SANRAL. It is, however, being more selective in the projects it tenders for due to the threat of the ‘Construction Mafia’ and is reducing exposure by tendering on more private road works. Raubex has a strong order book and continues to obtain high-value road construction work despite SANRAL delays. It was awarded the Senqu bridge project, worth R2.4bn, and will likely be the preferred contractor for the South African side of the Beitbridge border post. If Raubex has the capacity, it could be a frontrunner for the Komatipoort border post as well.