Road builder Raubex feels the squeeze of state belt-tightening
Plunging earnings, retrenchments and a slashed dividend characterise the first half, though the group’s secured order book has grown 12%
Construction group Raubex felt the squeeze as the government tightened its belt in an attempt to keep the budget deficit within reasonable limits. Headline earnings per share plummeted 72.8% to 36c in the six months to end-August as the SA National Roads Agency (Sanral) cut back on spending, the company said on Monday. It slashed its interim dividend to just 12c per share, from 45c a year ago. The construction division, which is made up of road surfacing and rehabilitation, and road construction and earthworks, felt the effect of government austerity measures.
“We have continued to experience very challenging conditions in the SA construction industry, particularly in the road construction sector, where the low volume of work experienced during the first half of the year has resulted in the group’s asphalt and bitumen supply operations being rightsized in order to adjust to the current level of demand,” CEO Rudolf Fourie said. About 280 employees were retrenched in the road su...