Key message: Lockdown resulted in approx. R200m in standing costs, but Raubex has emerged with the balance sheet in a better position that at the end of Feb 2020. The recently released SIPS seem to favour roads projects to be the first to market.

  • Raubex released a Trading Statement for the six months to August 2021 (1H FY21). HEPS is expected to be at least 80% lower than the 58.6c reported in the previous period.
  • This is in line with our forecast of 6c for 1H FY21 (90c for the full FY21).
  • Cash generation has remained steady through the lockdown period where normal levels of operations have been achieved by the end of July 2021 (a full shutdown of SA and African operations was in place for April followed by a gradual easing of restrictions).
  • Cross-border logistical issues have impacted some African operations. Western Australian operations were minimally impacted by Covid-19.
  • Cash balances in July at R1.4bn are running ahead of that reported in February 2021of R1.01bn, boosted by the R130m proceeds from the property sale and leaseback transaction.
  • Debt levels have remained stable at just over R800m.
  • Raubex has weathered the initial Covid-10 lockdown period well, in our opinion, with cash balances not being impacted by standing costs. The balance sheet remains in a healthy position (net cash). Management had forecast a R200m standing cost for the lockdown (the monthly wage bill is approx. R150m).
  • SANRAL is still due to adjudicate on R18bn of tenders shortly with RBX hoping for awards of R4-5bn. ACSA has cancelled tenders for two runway expansion projects due to Covid impacts on aviation.
  • The gazetting of 18 Strategic Integrated Projects (SIPS) on 24 July following the Sustainable Infrastructure Development Symposium which was hosted by President Cyril Ramaphosa on 23 June 2020 indicates some movement in infrastructure development. The roads related work in the SIPS seems to be the most likely to be realised in the short-term, in our opinion, with tender processes for highlighted projects at an advanced stage.

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