JSE-listed construction materials supplier Raubex expects its earnings a share for the financial year ended February 28 to be at least 231% higher year-on-year, while its headline earnings a share are expected to be at least 250% higher year-on-year.

The company had posted earnings a share and headline earnings a share of 87.4c and 81.9c, respectively, in the prior financial year.

Raubex attributed the increase in earnings a share and headline earnings a share to an improved performance in the second half of the financial year under review, as well as its diversified business model that enabled it to benefit from the increased tender activity in the construction sector.

As at period's end, Raubex’s roads and earthworks division was progressing with several projects and the company reports that the division is experiencing increased demand for bitumen.

Tender activity in the market remains buoyant, with the company anticipating further contract awards that will support the current strong order book, going forward.

Raubex’s materials division also experienced stable operating conditions during the financial year and its diversified operations, including materials handling services to the mining sector and commercial aggregate supply, continue to support the group’s earnings.

In addition, the company’s infrastructure division experienced favourable conditions in the building sector and was well supported by the strong performance of the Western Australia operations.

In the South African renewables sector, the delay in the startup of the Risk Mitigation Independent Power Producer Procurement Programme projects impacted on Raubex’s profitability. Its related division is, however, well-positioned to benefit from the roll out of bid windows five and six of the Renewable Energy Independent Power Producer Procurement Programme.

Raubex also reports that its flagship project relating to the expansion, upgrading and improvement of the Beitbridge border post project, in Zimbabwe, which was awarded at the end of 2020, is progressing well and is on schedule to meet all remaining milestones.

Moreover, the group is encouraged by government’s commitment to the South African Economic Reconstruction and Recovery Plan and the substantial budget allocations for public infrastructure spend over the next few years.

Raubex reports that it has maintained a strong balance sheet and a healthy cash balance throughout the period, and combined with its diversified operations, is well-positioned to participate in increased construction activity in the South African market.

Meanwhile, during the period under review, Raubex increased its stake in junior mining and exploration company Bauba Resources to 51%. Bauba has various mineral reserves under licence and Raubex is encouraged with the progress Bauba has made to date.

As such, Raubex expects to start benefitting from this strategic partnership in the 2023 financial year.