Raubex CEO Rudolf Fourie on resilient results and prospects

Raubex produced a robust set of numbers of its 2021 financial year-end, all things considered. No-nonsense CEO Rudolf Fourie unpacked the results further and was upbeat about what lies ahead for the roads and civil infrastructure construction group. The order book ballooned to R17bn from R10bn in the prior year, which was especially encouraging for shareholders.

Raubex CEO Rudolf Fourie on doubling the company’s share price:

You can’t really look much into last year’s figures. It was heavily impacted by Covid. We didn’t work for three months. So we showed quite a strong recovery. What’s very encouraging is the order book. We are seeing that government is spending money on infrastructure, SANRAL, housing and public works. We were quite pleased with the Beitbridge border post – which is our biggest contract ever. It’s a R2.5bn contact, upgrading the border post.

Going forward, hopefully it will be better. What’s quite encouraging, is that there’s quite a lot of tender activity at the moment in the construction phase – certainly levels we have not seen in my 50 years before. Hopefully, going forward, we could see the construction industry lifting its head. We managed to survive [and] keep our balance sheet intact. Hopefully we’re in a good position now to leverage over that going forward.

On the Beitbridge border post contract:

Beitbridge border post is a concession contract. The banks – mainly South African banks are our client – we’re getting paid in dollars. We do the project from Musina, the South African side. We see it, really, as a home project. There’s no risk that a client defaults on payment, because the banks – as South African banks – are our clients paying us as part of the concession contract. The risk profile is a bit different. The work we’re doing there is basically what we do daily. It’s buildings, parking areas, access roads, reservoirs, dams and housing. That really suits our profile and we consider it to be close to home.

On Cameroon:

Cameroon was unfortunately different. It was a mall we built in Douala. 12 months ago we had experienced problems with getting our equipment, stock and materials imported. We had some logistic delays. But then, Covid happened. For six months, we were locked out of Cameroon. Our people were stuck inside and couldn’t get out. We couldn’t get people into Cameroon from this side, to  commission and complete the mall.

A big portion – R60 odd million – of that loss was just because of Covid. Now, unfortunately, what we see now working in Africa because of Covid, access and boundaries, we’ve had similar problems in Mozambique, Botswana and Libya. For that reason, we decided to pull out of Cameroon, but we got a bit of a difference with regards to Beitbridge border – because it’s much closer to home. The problem with working in Africa is that there’s nothing. You need to commission everything – from your elevators, air-con, lifts. The advantage we’ve got in Beitbridge is that we’re sourcing it from Johannesburg. So it’s quite a big difference.

On the business in Australia:

What we like about Australia. It’s a very regulated market with the same rules for everybody. It makes planning and management much easier. Australia is not a big portion of the business (about 10%) but we showed quite good results this past year. It’s growing nicely with a decent margin. We would like to develop it. We’re not going to do major acquisitions there. What makes it different is that we are a smaller type of contractor in Australia, not as big as there, because it’s less competitive. We are in a very specialised market in Australia and we will continue to focus on this business in a specialised client base. We are not doing the major design and build construction jobs. To give you an idea, we typically do R100-R150m contracts, which is on a much smaller scale compared to what we’re doing here.

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