Raubex : Summary audited group financial results for the year ended 29 February 2024

2024

AUDITED SUMMARY GROUP

FINANCIAL RESULTS

FOR THE YEAR ENDED 29 FEBRUARY 2024

Raubex Group Limited  |  (Incorporated in the Republic of South Africa)  |  Registration number 2006/023666/06

Share code: RBX  |  ISIN code: ZAE000093183  |  ("Raubex" or "the Company" or "the Group")

Results at a glance

For the year ended 29 February 2024

Revenue increased to

R17.43 billion

13.8%

(2023: R15.31 billion)

Operating profit	R1.54 billion	20.4%
increased to
(2023: R1.28 billion)
Earnings per share	472.1 cents	20.7%
increased to
(2023: 391.1 cents)
Headline earnings	476.3 cents	21.3%
per share
increased to	(2023: 392.8 cents)
Cash generated	R1.90 billion	2.9%
from operations
decreased to	(2023: R1.96 billion)
Net asset value	R6.61 billion	13.9%
for the year
increased to	(2023: R5.80 billion)
Capital expenditure	R1.76 billion	53.0%
increased to

(2023: R1.15 billion)

Order book increased to

R25.55 billion

27.5%

(2023: R20.04 billion)

Total dividend increased to

155 cents

20.2%

(2023: 129 cents)

1 Raubex Group Limited

Audited summary Group financial results for the year ended 29 February 2024

Introduction

This year Raubex celebrates 50 years of excellence and growth, an absolute testimony to the resilience of the Group. The Group's performance for the year ended 29 February 2024 has been commendable, particularly given the myriad of challenges faced by the country as well as the industries in which it operates. This performance is especially pleasing in light of the fact that the Beitbridge Border Post project is no longer included in the numbers, given the completion of the project in the prior financial year.

The Group's results this year were attributable to all four divisions (i.e. Materials Handling and Mining, Construction Materials, Roads and Earthworks, and Infrastructure) contributing, with each division receiving tender awards from a diversified client base. This resulted in the Group having a strong and growing order book despite the prevailing unfavourable trading conditions and a slow start to the year.

The perseverance of the Raubex team and the robust strategy will ensure the sustainability of the Group over the medium to long term. The balance sheet and the cash generated from operations remain healthy, which will further allow the Group to secure meaningful tenders going forward.

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Audited summary Group financial results for the year ended 29 February 2024

Financial overview

Revenue increased by 13.8% to R17.43 billion (2023: R15.31 billion), mainly as a result of the very strong performance of the Materials Handling and Mining Division, more specifically Bauba Resources (Pty) Ltd ("Bauba") as well as another strong performance from Western Australia.

Operating profit increased by 20.4% to R1.54 billion (2023: R1.28 billion) and the Group operating margin improved

to 8.8% (2023: 8.3%).

For the comprehensive financial overview and operational performance of each division, please refer to pages 4 to 11 of this report.

Net finance costs increased to R64.4 million (2023: R47.2 million), a 36.6% increase - mainly due to a higher net

debt balance and higher interest rates over the year. Finance costs include R30.5 million (2023: R33.1 million)

interest attributable to lease payments accounted for in terms of IFRS 16: Leases. Finance costs on bank borrowings for the year under review increased from R75.0 million (2023) to R132.2 million (2024), an increase of R57.2 million or 76.2%.

Profit before tax increased by 20.5% to R1.47 billion (2023: R1.22 billion).

Earnings per share was 20.7% higher at 472.1 cents (2023: 391.1 cents) and headline earnings per share increased

by 21.3% to 476.3 cents (2023: 392.8 cents).

Included in the net impairment losses on financial and contract assets is R67.8 million (2023: R47.3 million) bad debt recovery received from the Zambia Roads Authority.

Cash generated from operations before finance charges and taxation remained strong at R1.90 billion (2023: R1.96 billion). Cash and cash equivalents ended the year at R1.66 billion (2023: R1.70 billion), a slight decrease of 2.1%.

Trade and other receivables increased by 9.2% to R2.07 billion (2023: R1.89 billion) as a result of the increase in

turnover for the year, while the average debt collection days improved to 38 days (2023: 39 days). Inventories were

15.9% higher at R1.51 billion (2023: R1.31 billion) owing mainly to the increase in development land as well as

greater ore levels at Bauba. Trade and other payables increased by 7.3% to R2.84 billion (2023: R2.65 billion).

Capital expenditure on property, plant and equipment grew to R1.76 billion (2023: R1.15 billion), an increase of 53.0%. The increase is mainly due to the operating and mining efficiency spend at Bauba of R403.7 million, the capitalisation of mine infrastructure development and stripping costs of R443.0 million (2023: R268.4 million) and the capital requirement for the Namdeb Diamond Corporation ("Namdeb") operations of R195.4 million.

Borrowings increased by 41.3% to R1.72 billion (2023: R1.21 billion), largely to support financing requirements at Bauba and Namdeb.

3 Raubex Group Limited

Audited summary Group financial results for the year ended 29 February 2024

Divisional review

MATERIALS HANDLING

AND MINING DIVISION

		Year ended	Year ended
		29 February	28 February
	Change	2024	2023
R'million	%	Audited	Audited
Revenue	39.6	4 017.9	2 878.0
Operating profit	246.8	584.7	168.6
Operating profit margin		14.6%	5.9%
Capital expenditure	86.1	1 291.5	693.9
Order book	38.2	5 048.1	3 653.2

The Materials Handling and Mining Division comprises four main disciplines: contract crushing; materials handling and mineral processing services for the mining industry; contract mining; and specialised resource ownership through its investment in Bauba.

Revenue for the division increased by 39.6% to R4.02 billion (2023: R2.88 billion) mainly due to the improved production at Bauba as a result of the Kookfontein mine's north and south pit coming online at the start of the FY2024. Operating profit rose by a remarkable 246.8% to R584.7 million (2023: R168.6 million), with the operating profit margin increasing to 14.6% (2023: 5.9%).

The Materials Handling and Mining Division's investment in Bauba continues to perform well as the demand for chrome and PGM ore remains favourable. The performance of Bauba was also supported by high chrome ore prices and a weak Rand to the US Dollar. Bauba's Kookfontein opencast chrome mine performed well during the year under review, despite the slow start of the financial year. Phase 1 of the 80 000 tonne per month ore wash plant and crushing circuit at its Kookfontein operation, was successfully commissioned during the 2H2024, which will improve profits in FY2025 due to being able to sell processed chrome. Operations at Moeijelijk mine was impacted by the installation of an underground conveyor system that disrupted operations in the 1H2024 and resulted in production targets not being achieved for the FY2024. A new mining contractor has been appointed effective 1 March 2024 which should result in an improved performance for FY2025. Logistical constraints at South Africa's harbours remain the biggest challenge faced by this industry as it negatively impacts export sales volumes. This, however, had no impact on the Group for the period under review.

Bauba completed the acquisition of a 74% ownership of Naboom Mining Company, a large undeveloped opencast primary chrome with PGM resources, located on the eastern limb of the Bushveld Igneous Complex, during the latter part of FY2024. Naboom Mining Company has 17.7 million tonnes of mineral resources estimate ("MRE") across the chrome ore seams with an estimated life of mine of 12 years.

B&E International (Pty) Ltd's ("B&E International") margins improved during the year under review given the solid performance of the five-year Namdeb contract and is ahead of schedule. The Namdeb contract provides mining services to Southern Coastal Mines in Namibia. The demand for contract crushing for the construction sector remains stable on the back of SANRAL tenders being awarded, albeit slowly. B&E International operates and maintains the processing plant at Bauba's Kookfontein and Moeijelijk mines, and the contract performs well.

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Audited summary Group financial results for the year ended 29 February 2024

Divisional review continued

SPH Kundalila (Pty) Ltd's ("SPH") operations were negatively impacted by the Pilanesberg Platinum Mine contract being terminated due to the closure of the mine.

The well-documented Transnet railway issues continue to negatively impact the iron ore materials handling contract of SPH at Saldanha harbour and no solution is expected over the medium to long term.

The collaboration opportunities between the Group's four divisions provide opportunities for Raubex, particularly concerning Bauba's operations. At Bauba's Kookfontein open pit mine, mining activities are managed by SPH, while materials processing is handled by B&E International at the Moeijelijk and Kookfontein mines. Raubex Construction has concluded the construction of a tailings facility and service dam at the Kookfontein mine during the 2H2024. The Group, through its subsidiaries, will continue to focus on further developing investment opportunities, which is demonstrated by the acquisition of the 74% interest in Naboom Mining Company.

The force majeure restrictions imposed on operations in Mozambique due to political instability is still in place, but these restrictions are expected to be lifted in FY2025 and operations should be able to recommence.

OMV (Pty) Ltd's ("OMV") gypsum operations had a lacklustre performance on the back of the low demand for cement through the Materials Handling and Mining Division. However, the Rustenburg gypsum plant continues to perform well.

OMV's aggregates and ready-mix operations also performed well due to work secured in supplying aggregates and ready-mix to the Kareerand Tailings Storage Facility project.

OMV's investment in Attaclay, a bentonite mine located in Steelpoort, delivered a solid performance due to increased production to meet the demand for bentonite, a critical component in constructing tailing facilities and in smelter furnaces reducing the environmental impact and lower operational costs. OMV added an additional bentonite mill in Olifantsfontein to meet the increased demand. OMV's industrial minerals operations also had a good financial year.

The capital expenditure amounted to R1.29 billion (2023: R693.9 million). The increase of 86.1% is mainly attributable to the large capex spend required on the expansion of Bauba's operations as well as the Namdeb contract. The R1.29 billion capital expenditure includes the capitalisation of mine infrastructure development and stripping costs of R443.0 million (2023: R268.4 million) at Bauba.

As at 29 February 2024 the secured order book was R5.05 billion (2023: R3.65 billion), an increase of 38.2%.

Bauba: Moeijelijk Mine

5 Raubex Group Limited

Audited summary Group financial results for the year ended 29 February 2024

Divisional review continued

CONSTRUCTION

MATERIALS DIVISION

		Year ended	Year ended
		29 February	28 February
	Change	2024	2023
R'million	%	Audited	Audited
Revenue	29.0	2 421.7	1 877.2
Operating profit	41.1	115.0	81.5
Operating profit margin		4.8%	4.3%
Capital expenditure	(5.9)	130.5	138.7
Order book	71.7	1 719.1	1 001.3

Revenue and operating profit for the division increased by 29.0% to R2.42 billion (2023: R1.88 billion) and 41.1%

to R115.0 million (2023: R81.5 million), respectively. The operating profit margin also increased to 4.8% (2023: 4.3%) despite the rising fuel prices, high bitumen prices linked to the oil price, and ongoing loadshedding for most of the year under review. Despite the lower margins, strong operating cash flows were generated.

The commercial quarry operations in South Africa performed well mainly due to increased volumes in the Northern region. Certain quarries in the Southern region also performed well on the back of road projects and ballast contracts. The Butterworth quarry, located in the Eastern Cape, continued to perform exceptionally well due to increased economic activity in this region. Collectively, the quarries produce 5.7 million tonnes of aggregates and sand per year.

Performance from the quarry operations in Botswana was boosted by the water-related infrastructure projects in the surrounding areas of Gaborone.

Further restructuring is planned for the asphalt business in the KwaZulu-Natal region. During 1H2024, a strategy was put in place to reduce the asphalt footprint in KwaZulu-Natal. A second phase of restructuring is planned due to further operational losses incurred in 2H2024. Unfortunately, this will result in more retrenchments and costs associated with the closing of these operations. The total restructuring costs for the year under review is estimated at approximately R72 million. To meet current demands, the remaining asphalt plants were upgraded to service the N3 and N2-projects.

Due to the heavy rainfalls experienced in KwaZulu-Natal, a large number of planned volumes on the order book has been carried over into FY2025.

The profitability of asphalt operations in the rest of South Africa remained under pressure during FY2024 due to delays in the awarding of projects. As a result of these delays, increased input costs are not fully recoverable through escalation and/or 'rise-and-fall' adjustments. However, a strong pipeline of new road contracts bodes well for FY2025.

The higher demand for bitumen products during the summer months in the second half of the financial year, resulted in a solid performance by Tosas.

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Audited summary Group financial results for the year ended 29 February 2024

Divisional review continued

The shortage of bitumen throughout South Africa due to reduced production from Natref (the only remaining refinery that produces bitumen in the country) continues. This necessitated Tosas having to import and store more than expected bitumen volumes which places working capital constraints on the business. Currently, Tosas imports about 75% of its bitumen requirements and procures the balance locally from the Natref refinery. Tosas has successfully aligned itself with reliable international suppliers with the correct quality bitumen.

Historically, South Africa boasted four refineries, supplying more than the required bitumen volumes to sustain the projects, while even exporting. Currently, only Natref (Total and Sasol) in Sasolburg remains operational. It is crucial to note that even Natref has reduced its bitumen production by almost 50%, intensifying the bitumen supply constraints. The implication of this reduction is far-reaching. While Total and Sasol out of Natref continue to provide wholesale list prices, Masana (BP), Rubis and others have become permanent importers which we now rely on for tender pricing purposes. For projects in the Northern region, the demand, unfortunately, exceeds the supply by far in this region and that often results in serious costing complications to keep contracts supplied at higher costs of stored and imported bitumen.

The capital expenditure amounted to R130.5 million (2023: R138.7 million), a decrease of 5.9%. The secured order

book was R1.72 billion at 29 February 2024 (2023: R1.00 billion), an impressive 71.7% increase.

Tosas

7 Raubex Group Limited

Audited summary Group financial results for the year ended 29 February 2024

Divisional review continued

ROADS AND

EARTHWORKS DIVISION

		Year ended	Year ended
		29 February	28 February
	Change		2024	2023
R'million	%	Audited	Audited
Revenue	(6.1)	5	668.4	6 038.0
Operating profit	(35.1)		331.5	510.9
Operating profit margin			5.8%	8.5%
Capital expenditure	56.1		164.4	105.3
Order book	30.2	10	158.1	7 802.5

Revenue in the Roads and Earthworks Division decreased by 6.1% to R5.67 billion (2023: R6.04 billion), mainly due to the completion of the Beitbridge Border Post Project in the previous financial year. No profits from this project are thus included in the division's results during the year in review.

Operating profit decreased by 35.1% to R331.5 million (2023: R510.9 million). The operating profit margin

decreased to 5.8% (2023: 8.5%), well within the management target range of between 5% and 6%. Excluding the Beitbridge Border Post Project from the previous year's results, revenue and operating profit increased by 8.0% and 47.3%, respectively, demonstrating the sustainability of the underlying operations.

All the major SANRAL projects, especially on the upgrade of the KZN corridor, are running at full capacity and performing well. SANRAL has also been awarding new projects during the 2H2024, albeit at a slower pace than anticipated.

The various concession projects for N3TC, Bakwena and TRAC throughout South Africa, are also running on schedule. These concessionaires have already started with an aggressive tender roll-out process as part of their obligation to hand over the management of the SANRAL roads they oversee in a well-maintained state between 2027 to 2031, which marks the end of their 30-year concession period.

The construction on the Senqu River Bridge joint venture project in Lesotho for the Lesotho Highlands Development Authority, which commenced at the beginning of 2023, is slightly behind schedule, however still progressing well. This three-year project is being implemented at attractive profit margins, with 10% of the project fee having been received in advance.

The Roads and Earthworks Division has delivered on their strategy of securing more non-SANRAL projects from other customers. The noteworthy projects secured include contracts from the Western Cape Provincial Government amounting to R1.02 billion, the Bakwena N4 Rustenburg project amounting to R1.3 billion and smaller road contracts at various mines.

During the reporting year, the Group recovered R67.8 million from the Zambia Road Development Agency for the debt previously written-off in FY2019. As at the end of February 2024, the outstanding debt balance was R70.3 million. Subsequent to year-end, an additional R15 million was received and going forward, further periodic payment tranches are expected.

The capital expenditure amounted to R164.4 million (2023: R105.3 million), a 56.1% increase. The increase is attributable to capital expenditure for the Lesotho Senqu River Bridge contract amounting to approximately R58.5 million.

The secured order book increased by 30.2% to R10.16 billion (2023: R7.80 billion) at 29 February 2024.

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Audited summary Group financial results for the year ended 29 February 2024

Divisional review continued

INFRASTRUCTURE

DIVISION

		Year ended	Year ended
		29 February	28 February
	Change	2024	2023
R'million	%	Audited	Audited
Revenue	17.8	5 317.1	4 514.4
Operating profit	(1.9)	505.5	515.2
Operating profit margin		9.5%	11.4%
Capital expenditure	(17.2)	177.7	214.7
Order book	13.8	8 623.2	7 579.6

The Infrastructure Division specialises in disciplines outside of the road construction sector, including energy (with a specific focus on renewable energy), facilities management, telecommunications, housing infrastructure projects, and commercial building refurbishment and construction.

The solid performance delivered by Western Australia was the main contributor to revenue growth for this division. Revenue increased by 17.8% to R5.32 billion (2023: R4.51 billion) and operating profit decreased slightly by 1.9% to R505.5 million (2023: R515.2 million). Operating profit margin also decreased to a more normalised 9.5% (2023: 11.4%). The decrease in operating profit compared to revenue growth is attributable to the completion of the Beitbridge Border Post Project in the previous financial year. Excluding the Beitbridge Border Post Project from the previous year's results, revenue and operating profit increased by a pleasing 42.7% and 120.4%, respectively.

The floods experienced in KwaZulu-Natal for the year under review, severely impacted the already fragile infrastructure in this province. Although none of Raubex's projects were materially impacted, various awards were received as result of the flood damage. The flood damaged Tongaat Bridge Project is progressing well. We have received several additions to our order book in our concrete structures unit that are mostly related to the repair of stormwater damage to concrete structures in the Western and Eastern Cape as well as KwaZulu-Natal.

The 17-year maintenance project on the Beitbridge Border Post Project in Zimbabwe, to the value of R1.5 billion, has commenced and is progressing well.

The division's affordable housing projects are progressing well as the demand for this low-cost accommodation increases on the back of the current economic conditions, exacerbated by high interest rate levels. In the housing sector, several anchor projects include the 2 900-bed student housing project for Unilim in Limpopo, housing projects in Stellenbosch, and the Lufhereng project in Soweto. The division's residential housing projects include the construction of 201 houses in the mining town of Aggeneys as well as the development of Kleijne Wingerd in Cape Town and the Newinbosch and Voliere projects in Stellenbosch. The Western Cape remains popular as semigration to this region continues unabated. Sales of our own Newinbosch development are noteworthy.

9 Raubex Group Limited

Audited summary Group financial results for the year ended 29 February 2024