Good morning, ladies and gentlemen, and a warm welcome to our Results Webinar for the Six Months ended 31 August 2024. My name is Felicia Msiza, and I am the CEO of the Raubex Group. With me in the room is Dirk Lourens, our COO, Sam Odendaal, our FD, and Grace Chemaly, our company secretary and legal advisor. I have the pleasure of welcoming you to our call today. As is customary, I will start and make some high-level remarks, then hand over to Sam Odendaal, who will take you through the financial overview, and Dirk Lourens, the operational overview. I will then come back with a review of our outlook, order book, and value proposition, which speaks to our strategy. There will be an opportunity to ask questions at the end of the session. Just a reminder of who we are and what we do.
Raubex remains one of South Africa's leading infrastructure, development, and construction materials supply group, operating for over 50 years. Today, we are pleased to deliver a strong set of interim results. Let us look at the period in review. The group delivered an excellent set of results for the first half of 2025 financial year. These results are supported by a healthy cash generated from operations. There is a marked improvement in headline earnings per share and return on capital employed. Looking at our operational performance, this is characterized by the positive market sentiment, which improved post the national elections early in May this year. Our operations are also characterized by the diversified business model, which spreads risks and opportunities. We have focused on operational efficiencies in all divisions during this period.
It is only fitting that during the year we celebrate our 50th anniversary, our share price also traded above ZAR 50 per share. We have delivered 50 years of excellence to our clients. Looking at our order book, we have retained a solid quality order book by securing contracts during the period. The order book is holding comfortably at elevated levels of ZAR 24.5 billion, a marginal decline compared to the previous reporting period. Our order book was at ZAR 25.5 billion at year-end. We continue to focus on executing the order book profitably. Lastly, looking at tender activities, we have experienced an increased tender activity throughout the group. We continue to be selective in taking on opportunities with good risk versus reward ratio. We have received awards in all divisions. Our results are testimony to the perseverance and resilience of the group.
We have remained consistent, and we are very proud of this solid result. I will now hand over to Samuel Odendaal, who will take you through the financial overview.
Thank you, Felicia. Good morning, ladies and gentlemen. Just from my side as well, I'm very pleased to present the financial highlights from our results for the six months to August 2024. Revenue is up 29.7% to ZAR 10.95 billion. Operating profit up 34.7% to ZAR 846 million. Headline earnings per share increased to ZAR 2.843 per share. We generated good cash from our operations of ZAR 1.54 billion, up 111.5%. Capital expenditure also decreased to ZAR 757.6 million. We are maintaining our order book around the ZAR 25 billion mark. The group's operating profit margin is healthy at 7.7%.
We declared an interim dividend of ZAR 0.94 per share, and our return on capital employed also increased to 17.1%. Looking at a summary of the income statement, we did look at revenue, operating profit, and margins. Included in operating profit is a recovery from old Zambia debt of ZAR 20 million. Our net finance cost increased slightly to ZAR 31 million. Profit after tax is up 34% to ZAR 590 million. The effective tax rate is higher at 28.1% from 26.7% the previous year. The corporate tax rate in South Africa is 27%, but we generated good profits from our Australian and Namibian operations, where the corporate tax rate is higher. I believe 28% will be a normal... more normalized tax rate going forward....
Profit to non-controlling interests decreased 17.9% to ZAR 77.5 million. Our earnings per share and headline earnings per share is up almost 50%. If we look at the segmental analysis, that's the makeup of the revenue and the operating profit per division as a percentage of the total revenue and operating profit for the group. If we look at the revenue first, the bigger wheel is the current reporting period compared to the smaller wheel for the comparative period. There was a slight increase in revenue contribution in the materials handling and mining division, from 23% - 24% of the group's turnover. The construction materials division's contribution is slightly lower at 13%, compared to the 15% in the previous year. This division did more work for companies in the group, which is eliminated on consolidation.
Revenue in the roads and earthworks division is 32% of the group's turnover, and the infrastructure division revenue contribution is the same at 31% of the group's turnover. In summary, the contributions by each division was in line with that of last year, with an increase in revenue from ZAR 8.45 billion to ZAR 10.95 billion. If we're moving over to the operating profit distribution, it was a good contribution by all the divisions. Starting again with the materials handling and mining division, operating profit contribution decreased from 33% to 26%. The biggest reason for the decrease was because Kookfontein was in a ramp-up phase with commissioning of the wash plant and crushing circuit, and there was a change in the underground mine contractor at Mooihoek Mine that slowed down production.
The construction materials division contribution increased significantly from 10%-14%. The biggest reason for the increase was because of the improved results from our asphalt operations. We are done with the restructuring process in KZN, and operations are performing well. Operating profit contribution in the roads and earthworks division also increased from 24%-30%, and all projects in this division is performing very well. The infrastructure division contributed 30% to the group's total operating profit, with the biggest contribution in this division coming from the Australian operations. Overall, we're very happy with the balanced contribution to operating profit by all the divisions in the group. Moving to the geographical segment analysis. Looking at turnover first, the South African operations contributed 76% to the group's turnover.
Revenue in the rest of Africa increased more than 50% to that of the previous reporting period, with good contributions by our Namdeb operations in Namibia and the Senqu River Bridge project in Lesotho. But because of the overall revenue makeup of the group, the contribution only increased slightly from 5%- 6%. Similarly, Australia had a slight increase in revenue compared to the previous period, but the overall contribution to the group's turnover came down from 22%- 18%. If we look at the operating profit contribution, the South African operations contributed 64% to the group's operating profit. The rest of Africa contribution increased to 17%. The biggest contributors to the rest of Africa operation profit was the Namdeb project in Namibia and the Bela-Bela quarry operations in Botswana. The Australian operations is contributing almost 20% to the group's operating profit.
This is a look at the group's performance over the last five years. Looking at the interim operating profit, it was as low as ZAR 22 million in 2021 and grew over the last few years to almost ZAR 850 million for the 2025 interim results. After the restructuring in the asphalt business, the construction materials division increased their operating profit substantially in 2025, and this resulted in a more even contribution between the four divisions. If you look at earnings growth, it's in line with operating profit growth, and the group is consistent in paying out dividends to their shareholders. Cash flow generation is very important to the group, and I'm very pleased with the healthy increase in the cash generated from operations, up to ZAR 1.5 billion for the six months.
This resulted in an overall increase in the group's cash, up from ZAR 1.66 billion to almost ZAR 2.2 billion at the 31st of August. Management has a big drive to improve on the capital we employ, and the return on capital employed increased from 5.8% in 2021 to 17.1% currently. The track record indicate that the group keeps on evolving, and through our diversification strategy, we keep on performing consistently, creating value to our shareholders.... If we look at the summary of the statement of financial position, the group's balance sheet is still healthy, with assets totaling ZAR 14.7 billion, and shareholders' equity of over ZAR 6.9 billion. The biggest assets in the books is the property, plant, and equipment that increased by 8% to just over ZAR 5 billion.
CapEx spend for the year to date was around ZAR 750 million. We have a big drive to decrease capital spend. Spend was high in the last few years because of expansion, but most of the expansion CapEx spend at Bauba is now complete. Deferred tax asset and income tax receivable increased 24%. The biggest reason for the increase in the deferred tax asset is because of increased provisions. Inventory levels increased 5.5% to ZAR 1.59 billion. Contract assets that include work in progress and retention increased almost 13% to ZAR 1.1 billion. Retention is making up ZAR 450 million of that total. Trade and other receivables is up in line with the increase in turnover, but more important is that our debt collection days have improved to 36 days.
Cash and cash equivalents also increased significantly to ZAR 2.15 billion. We will look at the cash flow statement in the next slide. Borrowings increased by 12%, but our debt-to-equity is still at acceptable levels. Debt-to-equity is up slightly from 26%- 27.7%. If we look at the net asset value per share of the company, it increased 5.5% to ZAR 34.70 per share. As mentioned in the balance sheet commentary, the cash increased from ZAR 1.67 billion - ZAR 2.15 billion. Management has a big focus on cash management and cash generation, and we have done well improving the cash to the current levels. This slide indicate the major cash inflows and outflows.
We have had a strong cash generation from operations of ZAR 1.24 billion before working capital movements. Net working capital inflows was ZAR 280 million, with outflows in inventory, debtors, and contract assets, and inflows in payables and contract liabilities. The group paid tax of ZAR 218 million. The biggest cash outflows was investing activities, an outflow of ZAR 707 million, and this include replacement and expansion CapEx requirements of the group. Net borrowings was an inflow of ZAR 209 million, and we also paid dividends of ZAR 212 million. That brings us to the healthy closing cash balance of ZAR 2.15 billion.
An interim dividend of ZAR 0.94 per share was approved, and this is in line with our normal 3 times dividend cover policy, and included there is the relevant dates for the dividend. I will now hand you over to Dirk Lourens, our COO, for the operational overview.
Thanks, Sam. As it is customary, I start with a slide that highlight the group and how the four divisions complement one another. The Roads and Earthworks division focus on providing the full value cycle in road building. From the initial earth and layer works, the building of bridges, the crushing of road materials, and the laying of asphalt or chip and spray, until the final road markings and signage is done. The Construction Materials division focus on the manufacture and supply of the construction materials like bitumen, asphalt production, as well as commercial aggregates for the construction and building industry. Next up, the Materials Handling and Mining division specialize in the mining of several commodities like gypsum, bentonite, chrome, coal, manganese, and iron ore, to name a few. They handle millions of tons of ore on an annual basis for a variety of clients.
They also have a strong presence in the contract crushing and screening market for construction and the road building sector. Lastly, the Infrastructure division focus on developments and building works in the housing and commercial market, as well as the installation of services like streets and stormwater, telecommunications, water infrastructure. Renewable energy related to projects making up a big component of this division's workload. I am pleased to present the interim financial results for the Materials Handling and Mining Division. This division specializes in four main disciplines, namely contract crushing and screening, materials handling and mineral processing, contract mining, and resource ownership through its investment in Bauba Resources. B&E also recently added a successful drilling and blasting division to their value offering. Revenue increased by 39.1% to ZAR 2.66 billion, mainly due to the improved sales volumes at Bauba.
The reason being the Kookfontein chrome ore wash plant that came online at the start of the financial year. Operating profit rose by 7.1% from ZAR 208 million to ZAR 222 million. However, operating profit margin decreased slightly to 8.4% from 10.9% in the previous period, and the order book remains stable with a significant decrease in CapEx spend from ZAR 732 million in the previous period to ZAR 360 million in this period. I'm delighted to report that our flagship Namdeb project is performing above expectations. This project continues to set the benchmark for excellence and efficiency within our portfolio. In the construction sector, we have seen a notable increase in demand for contract crushing services, driven by recent roads projects awards.
This surge in demand underscores our strong market position and the trust our clients put in our capabilities. At B&E, we are successfully operating and maintaining the processing plants at Bauba, Kookfontein, and Mooihoek mines. These operations are running smoothly and contribute positively to the division's overall performance. We have successfully restructured the SPH operations in the Northern Cape by lowering their cost base, which in turn enhanced their operational efficiency and ensuring sustainable profitability. However, it is important to note that the numbers have been negatively affected in this period by the Saldanha Harbor ship loading operations. This was due to severe weather conditions, as well as delays incurred by Transnet on Sishen Saldanha iron ore line. Despite these challenges, the team has shown resilience and commitment to overcome these obstacles.
On a positive note, gypsum, commercial aggregates, and readymix sales at OMV have performed well, thanks to a general improvement in the construction activity in their region. The supply of aggregates and readymix concrete to the Kareerand expansion project in the North West Province is a big contributor to their performance. The bentonite sales volume sold by Attaclay from Steelpoort has also positively contributed to the division's success. Next, we will dig a bit deeper into the Bauba operations. Revenue has increased 73% from ZAR 884 million to ZAR 1,153 billion. Operating profit decreased 25.6% from ZAR 154 million to ZAR 115 million, and the operating profit margin is down to 7.5% from a high of 17.5%.
EBITDA is down with 17.5% to ZAR 191 million from a previous ZAR 231.5 million. The average rand/dollar exchange rate for the six months was slightly down from 18.53- 18.48 rand to the US dollar. The average met grade price, CIF China, increased with 6.2% from $285 per ton to $303 per ton in the previous period. Total production increased 50% to just north of 1 million tons from 700,000 tons in the previous period. Total run-of-mine tons sold decreased significantly by 87.6%, down to only 40,000 tons.
But in relation to that, the total tons concentrate sold increased with 225% to 421,700 tons. Capital expenditure decreased by 13.5% from ZAR 328 million- ZAR 284 million. The investment in Bauba continues to contribute well to the group, as the demand for chrome ore remains favorable. The chrome ore price remains stable despite the strengthening of the rand to the US dollar. The commissioning of the chrome ore wash plant and crushing circuit at Kookfontein was completed during this period, marking a significant milestone in our operational capabilities. As a key part of our growth strategy, the construction of the PGM plant at Kookfontein has begun, with commissioning expected in the first half of 2026.
At Mooihoek Mine, the change in underground mining contractor at the start of the financial year was costly, but necessary to improve safety and production. However, this led to a lower-than-projected production targets during the first half. There has been no meaningful change to Bauba's mineral resources and reserve statement. The rest of the group continues to benefit from various collaboration opportunities, created by the Bauba investment, fostering synergies and enhancing our overall performance. The Construction Materials division specializes in the supply of aggregates from commercial quarries, asphalt production, and value-added bitumen products. The revenue increased by 18% to ZAR 1.44 billion from ZAR 1.22 billion in the previous period... The improved performance was due to good execution of the improved order book, following the award of various contracts towards the end of the 2024 financial year.
Operating profit increased by 97.3% to ZAR 122 million, from ZAR 61.8 million in the previous period, and the operating profit margin also increased to 8.5% from 5.1% in the previous period. The order book is down by ZAR 300 million, and CapEx spend about ZAR 30 million more in comparison to the previous period. The commercial quarry operations experienced a slow start at the beginning of the year before the national elections. However, post-election, we saw an increase in building material sales volumes, driven by expectations of lower interest rates. The positive developments at Transnet have boosted our quarry volumes in the north and south with the supply of ballast stone. Our focus remains to further strengthen our market position in this regard.
Our quarry operations in Botswana continue to excel, maintaining their status as the largest aggregate supplier in the country. The restructuring of the asphalt business in KwaZulu-Natal has been completed. The KZN region is now not only operating more efficiently at a lower cost base, but they has also contributed positively to the division's profitability. The heightened road construction activities, as well as a robust pipeline of secured orders at the beginning of the financial period, has led to a significant increase in our bitumen supply and road-building aggregate volumes in this division. The roads and earthworks division specializes in roads construction, bulk earthworks, as well as road surfacing and rehabilitation. This includes the laying of asphalt, chip and spray, surface enrichments, and slurry seals, as well as final road markings.
The division reported strong results, with revenue increasing by 31.2% to ZAR 3.486 billion, from a previous ZAR 2.657 billion. While the order book remains stable, this division are focused on the successful execution of the solid project pipeline. Operating profit increased by 74% to ZAR 257.3 million, from ZAR 147.9 million in the previous period, and the operating profit margin increased to 7.4% from 5.6% in the previous period. The operating profit margin exceeded management's medium-term target range of between 5% and 6%. Although the order book is slightly down to ZAR 9.84 billion, management are satisfied with the improvement of the quality of the order book. CapEx is also slightly down to ZAR 90 million.
All our SANRAL projects on the N2 and N3 corridor are performing exceptionally well. The consistency in the performance from this division is a testament to the team's dedication and level of expertise. The construction of the Senqu River Bridge in Lesotho is progressing very well. The last piers are nearing completion, and they successfully launched the first bridge deck sections. The increased activity in tender awards over the past few months has been very encouraging. Some of the noteworthy awards includes the Ceres-Vanrhyns Pass, as well as the Franschhoek and Theewaterskloof roads projects for the Western Cape provincial government, valued at ZAR 1 billion. The works on the Bakwena N4 Rustenburg project, valued at ZAR 1.3 billion, has commenced and is progressing very well.
We have secured ZAR 2.54 billion worth of new SANRAL roads projects since the beginning of this financial year, solidifying our strong market presence and capacity to secure and execute major contracts. Following the national elections and the forming of the GNU, a considerable number of contract awards are still pending from SANRAL and the toll concessionaires. During the reporting period, the group recovered an additional ZAR 20 million from the Zambian Road Development Agency for debt previously written off in the 2019 financial year. The infrastructure division specialize and focus on disciplines outside of the road construction sector, including renewable energy, telecommunications, water infrastructure, commercial and residential building projects, as well as facilities management. Revenue increased by 30% to ZAR 3.362 billion from ZAR 2.65 billion in the previous period.
This increase is mainly attributable to the award of several renewable energy contracts in South Africa, as well as Western Australia. The operating profit increased by 15.9% from ZAR 210.6 million- ZAR 244 million, and the operating profit margin decreased slightly to 7.3% from a 7.9% in the previous period. This was mainly due to the startup of the renewable energy projects during this period. The order book remains stable around ZAR 8.5 billion, and we incurred an increase in our CapEx spend from ZAR 97.4 million- ZAR 214.3 million... due to the project-specific CapEx that was needed on the renewable energy projects.
Our focus on privately-owned renewable energy projects has been successful with the award of two flagship projects: a ZAR 2.4 billion private wind farm project near Murraysburg in the Western Cape, and a ZAR 500 million wind tower manufacturing project near Jeffreys Bay in the Eastern Cape. Significant progress is being made on other solar projects in the central Karoo and the Northern Cape, contributing positively to the profitability of this division. The division has also secured several contracts for concrete repair works to stormwater structures in the Western Cape, Eastern Cape, and KwaZulu-Natal due to flood damage. The housing development projects are progressing well, with key projects including a 2,900-bed student housing project for the University of Limpopo, as well as the 1,446-bed Power Park student housing development next to the University of Johannesburg.
The Newinbosch and Boschervallei housing projects in Stellenbosch are performing better than expected. The group's international operations in the rest of Africa consist of material supply and mining services, as well as construction activities. Currently, we have running operations located in Botswana, Mozambique, Namibia, Zambia, Lesotho, Swaziland, and Zimbabwe. Our rest of Africa revenue increased by 54.5%, from ZAR 451.8 million- ZAR 698.1 million, with the biggest contributors being Namdeb in Namibia, as well as the Senqu River Bridge in Lesotho. The order book is slightly down to ZAR 3 billion from ZAR 3.5 billion in the previous period, and our CapEx spend is significantly down to only ZAR 10 million from a previous of ZAR 190 million.
Operating profit increased by 51.4% to ZAR 146.6 million, from a previously reported ZAR 96.8 million, and the operating profit margin remains unchanged at 21%. If you look at international rest of Africa, the group is comfortable with its current exposure to the rest of Africa and continues to investigate opportunities that meet the risk-reward profile. The operations and maintenance of the Beitbridge Border Post in Zimbabwe is ongoing, with about 15 years remaining on the O&M contract. The Senqu River Bridge project in Lesotho is making substantial progress. However, the joint venture remains conservative in realizing profits. The Namdeb project in Namibia is performing exceptionally well, displaying our expertise in major materials handling operations. Our Bela-Bela quarry operation in Botswana continues to excel and is still regarded as the largest aggregate supplier in the country.
Operations in Western Australia have been consistently strong, with revenue stable around the ZAR 2 billion mark. Our revenue increased 3.7% from ZAR 1.852 billion to ZAR 1.919 billion. Our order book has also increased similarly to ZAR 2.2 billion from ZAR 1.58 billion in the previous period. Operating profit increased by 13.9% from ZAR 139 million- ZAR 158.3 million, and the operating profit margin increased to 8.2% from 7.5% in the previous period. The increase in CapEx spend from ZAR 87.5 million to ZAR 117.5 million was due to project-specific CapEx on the wind farm projects.
If we look at international Australia, Western Australia continues to perform well and consistently meet our expectations. Westforce Construction is capitalizing on their successes in the wind farm renewable energy space by securing three additional contracts for wind farms and battery storage facilities. Roadmac Surfacing is meeting management startup expectations with a positive outlook for the summer months. Raubex Construction maintains their position as one of the key contractors for main roads, Western Australia. The team continuously explore further infrastructure opportunities in the mining and telecommunications, as well as the water sectors. In conclusion, the group's operations testify to a period of robust performance and strategic growth. This success is a testament to our collective efforts, innovative strategies, and unwavering commitment to excellence. I will now hand you back to Felicia for the outlook and strategy section.
Thank you, Dirk. I will now take you through our outlook and strategy. Looking at our order book comparatively with the previous reporting period at full year, we have maintained the order book almost at the same levels. We are turning around ZAR 65 million a day, and we have been able to replace the order book to the levels of ZAR 24.5 billion versus ZAR 25.5 billion at year-end. We have a diversified order book with private clients at 36.2% versus 34.9% in, at full year, followed by SANRAL at 20.9% versus 26.5% at year-end. Rest of Africa at 12.7%, provincial at 10%, relatively flat from the last reporting period. Australia, 8.9%, a good growth from 6.2% from year-end.
Another notable growth is the concessionaires work, which is now at 7.3%, comparable to 5.7%. The remainder of the order book is municipal and other parastatals work. Important to note is the timing of our order book, which spreads beyond three years. For the second half of this year, we have about ZAR 10 billion of work to execute, ZAR 7.8 billion of work in 2026, ZAR 4.7 billion of work in 2027, and ZAR 2 billion beyond. We are confident we will replace the order book as we continue with the execution of this order book. Our focus continues to remain on execution. The order book in terms of timeline per customer.
This graph shows the order book timeline over the next three years and beyond, which indicates that the pipeline of work over this period remains strong and consistent. To emphasize this graph is the growth of our private clients, which is at elevated levels of ZAR 8.8 billion, followed by international at ZAR 5.2 billion. Moving to slide 33, you can see the history of our order book and how the group has grown over the years. You can see SANRAL has remained on similar levels from 2021, on an average of about ZAR 6 billion mark. But important to note on this graph is the growth of our private client base, which grew to ZAR 8.8 billion compared to ZAR 2 billion mark around 2021.
Similarly, with our international, which is now around the ZAR 2 billion mark, which has actually grown from previous years. We are also pleased with our concessionaires order book growth. I still continue with the order book, looking at the customer per division. The materials handling and mining, the bulk of the order book is private clients, followed by international work. Our construction materials division, the bulk is private work. The roads and earthworks division, here, interestingly, you will see that this division has a diversified order book made up of SANRAL, concessionaires, provincial work, and a small portion of international. And then lastly, our infrastructure division. It also has a diversified order book with a good split between private and international, followed by municipal and provincial work. Let us now look at our segmental analysis.
This slide illustrate what each division's contribution to the group's order book is in terms of the segmental analysis. The roads and earthworks division remains the largest contributor to the order book at 40%, similar levels as at year-end. The infrastructure division follows at 34%, which is relatively flat compared to the previous reporting period. Materials handling and mining, 20% at similar levels, and lastly, the construction materials division at 6%. Let us now move over to our sustainability and ESG. We have consistently worked on improving our ESG and sustainability strategy, and I must say it is encouraging to see an upward improvement in our sustainability rankings as per the S&P Global Corporate Assessment Rating. We are also passionate about skills development, which includes youth education and employment.
Through the Bauba Internship Program, we aim to cultivate the next generation of industry leaders while contributing to the growth and sustainability of the mining sector. The bottom picture that you see there on the right is one of the many examples of how we serve our communities. Raubex has partnered with Kgomotso Crèche, based in Ga-Rankuwa, north of Pretoria, and we have committed a four-phase program to build and upgrade the facilities and enhance the education experience of young learners. 50 years of Raubex of excellence. This year marks our 50 years of operational excellence, and we made sure we celebrate throughout the year. Our teams from all sides in various countries celebrated the 50 years of togetherness in honor of this significant milestone.
This milestone reflects the history of where we come from, to the hard work and commitment of each and every employee, whom we acknowledge in this journey. The pictures in this slide are just some examples of how our people celebrated the Raubex 50th milestone. I would like to share some of the notable achievements that we have received in this period. Our flagship project, the Beitbridge Border Post Modernization project, was recognized at this year's SANRAL South African Institution of Civil Engineering National Awards, and achieved an international category for the Most Outstanding Civil Engineering Project. This is a milestone we are certainly proud of. So congratulations to all the teams and to Raubex for their involvement in this project. Getting to our core message, Raubex has over 50 years of building tomorrow, and our core message remains consistent. We have delivered pleasing results across the four divisions.
We continue with our diversified business model, spreading the risk and opportunities. One of our key strengths is the synergies within the group. Our future is supported by a solid order book, and we continue performing well in Western Australia. We continue to build the business to ensure that we have a sustainable business over the long term, while creating stakeholder value for all of our employees, shareholders, customers, and suppliers. Looking at our five-year strategy, which we started to implement about two years ago, our strategy remains unchanged. We continue focusing on profitability and a quality order book. Growth, by growing our market share, both locally and internationally. Being a preferred supplier associated with quality projects and service excellence. The renewable sector, both locally and in Western Australia. Technology, by prioritizing the use of technologies and products. PPPs, we consider PPP opportunities and grow organically through strategic acquisitions.
Lastly, our people, we develop and retain skilled employees. As I look to conclude, the outlook for the remainder of the financial year 2025 is optimistic, given the positive market sentiment post the elections and the formation of Government of National Unity. At a macro level, we remain encouraged by the reforms in the energy and logistics sectors, which are critical in unlocking economic growth. We are encouraged by the improvement of these sectors as it is restoring business confidence. Looking ahead, we are excited to take on more challenging projects while also investing back into our industry to drive sustainable progress. Zooming into the outlook of our divisions, let's first start with the Materials Handling and Mining division. This division is expecting to continue exploring strategic partnerships to increase mineral resources and improve production efficiencies.
Looking at our Construction Materials division, this division is anticipating a softer second half in 2025 versus the first half in 2025, but the division will still deliver a strong set of results. The softer expectation is mainly due to the construction break in December. Moving on to the Roads and Earthworks division. This division is optimistic for the remainder of the year, given the various infrastructure projects announced by the GNU... SANRAL's commitment to upgrade South Africa's roads and maintaining the existing roads. Lastly, the infrastructure division is positive about the second half of 2025, and should also outperform the financial year 2024 as a result of new affordable housing and private renewable energy projects. Our growth strategy remains underpinned by our diversified business model, specifically the strength of our diversified strategy, which has allowed us to consistently deliver value to our shareholders and stakeholders.
We have a committed workforce. The Raubex workforce remains the most valuable asset of the group. We're also supported by strength in leadership and a healthy balance sheet. In closing, I would like to thank our board for the guidance and support provided during this period. My sincere thanks also goes out to our ExCo and the incredible management team. These results would not be possible if it was not for your focus, dedication, and leadership. And to all of our employees in South Africa, Southern Africa, and Western Australia, we collectively delivered. We now look forward to the second half of the year. Thank you very much. We will now go to questions and answers.
Thank you very much, Felicia. We will now move on to the questions. Our first question is from Hashmeel Sooka, from FNB Wealth and Investments: What is the expected uplift or impact, perhaps in percentage terms, from government's infrastructure plans going forward?
Thank you, Grace, and thanks, Hashmeel, for that question. Look, there has been a positive general sentiment when it comes to planned infrastructure projects in the country, specifically post the establishment of the Government of National Unity. So as Raubex, we are expecting a significant amount of awards from various clients, the first one being on the SANRAL side. So there is a substantial amount of work that we are anticipating in this second half, coming. And also, in terms of other various infrastructure projects, I mean, there has been positive talks around water and wastewater treatment plans from an infrastructure public works point of view, and we believe as Raubex, we are set to benefit from those.
Importantly, you would also note that the South African border posts, the six border posts, those tenders actually closed, last month, and we are actually expecting, that the preferred bidders will be announced early next year, around February, March. Obviously, there will be a period of financial close, so we believe by the end of next year, we should know where we stand in terms of, those projects. So having said all of that, I will say that the impact will be great going forward. In terms of having to quantify in terms of percentage, that will be a bit difficult. Thank you.
Thank you very much, Felicia. Our next questions are from Lebo Mofokeng, from Truffle Asset Management. He has four questions, which I'm gonna read one by one and give you an opportunity to answer. The first question is: Can you comment on your yields at Bauba in the first half, and how do you see them in the second half?
Thanks for the question, Lebo. Yes, at Kookfontein, the yields, are, is definitely down from that of last year. We currently at an average of about 43% there, and we would like to, to increase that and improve. It will be improved in the, second half, definitely, and then also at Mooihoek mine, the yields is around the 50% mark, 54%. But the problem there was we did not get enough product from underground. And maybe if I can go, the second bit.
Thank you, Sam. Yes, the second question also relates to Bauba. Lebo says: Cash costs per ton increased significantly. Can you guide how we should think about cash costs for the full year, and also EBITDA margin expectations in the second half, assuming the first half chrome prices?
Thanks for that one, Lebo. Yeah, as you mentioned, the cash cost per ton did increase. It's obviously because of the ramp-up that we are busy with at Kookfontein, and also the change in the underground miner at Mooihoek. So yeah, definitely, it's now complete, and there's definitely gonna be an improved cost per ton in the second half. But unfortunately, that improvement will almost be countered by the drop in the chrome price. The chrome price dropped about 10%-12% in the second half, and then also the strengthening of the rand to the US dollar. That will also impact the selling price, and that would almost counter the improvement in the cost. So I expect no improvement in margin for the second half.
... Thank you, Sam. Then the third question, also from Lebo: There's been talks of stalling at SANRAL in terms of final awarding of projects. How has your interaction been with SANRAL, and are you confident that pending awards will go ahead in the near term?
So our interaction with SANRAL, Lebo, has been quite positive. We know that SANRAL remains key in terms of economic growth of the country. And you'll recall that last year, they actually revised their procurement policy and came back with a temporary procurement policy, if I may call it that. But subsequent to that, around August this year, they have finalized their policy, which is what we're used to in terms of the 90/10, 80/20 procurement policy, and they've also appointed the chief procurement officer. Look, I believe that with the budget that SANRAL has, I really believe that they would have to finalize. We are confident that they will finalize the pending awards, and I believe this will still go through before their year end. That is, March 2025.
Thank you, Felicia. And then the last question from Lebo is: Guidance on expectations around margins for the infrastructure division in the second half.
The guidance for the margins for the second half, I will say, is going to be similar to the first half of the financial year 2025.
Thank you very much, Felicia. Our next question is from Roy Cokayne, from Moneyweb: What has happened with Raubex's High Court application, lodged in 2023, seeking an order compelling the Department of Water and Sanitation to provide reasons for the award of a tender for drilling and blasting for the Clanwilliam Dam foundation excavation and slope protection to Phoenician?
Thank you, Roy, for that question. So with regards to Clanwilliam Dam, this is actually twofold in terms of the issues around the dam. So the first one is where we actually challenged the award, where this award actually went to another contractor. So the outcome of that challenge was that we actually won that challenge with costs. And the second part of that, in terms of the award of the bigger project, the ruling of the judge was that we did not comply with the CIDB grading, and therefore, we are not going ahead with that one.
Thank you very much, Felicia. Our next question is from Rowan Goeller, from Chronux: Please, can you provide a CapEx estimate for the next few years after the period of high CapEx recently?
Yes, Rowan, the CapEx spend was quite high over the last few years. It was ZAR 1.7 billion last year. We expect to come in this year at around ZAR 1.2 billion, and the next year, we are busy with, the budgets currently, but we would like to get to below ZAR 1 billion. Just taking into account that the prices of equipment have increased drastically over the last few years, but we would like to get it below ZAR 1 billion.
Thank you very much, Sam. Our next question is from Matthew, from Blue Quadrant. As SANRAL has been increasing their own CapEx, what has led to the decrease of orders from them from ZAR 6 billion to ZAR 5 billion? Do you expect the order book from SANRAL to increase substantially by year-end and into next year?
Thanks, Matthew, for that question. So going back to the strategy, we've always said that we want to have a diversified order book, and you need to look at the SANRAL order book together with other clients, including concessionaires, private work, and provincial work as well. So we've been deliberate in terms of making sure that we increase our concessionaire work and also private work as well. So we do know that SANRAL, without speaking on their behalf, they had to finalize their procurement policies. We are happy that that policy has been finalized. They also had some management changes now with the appointment of the chief procurement officer. So yes, we do anticipate the order book from SANRAL, if they actually do what they have actually come out to tell the market, to increase substantially by year-end.
Thank you, Felicia. Our next question is from Roy Cokayne, again, from Moneyweb. What impact does Raubex expect the recent acquisition by Old Mutual Private Equity and Sphere Holdings of 100% of Much Asphalt from AECI to have on the group's own asphalt production, asphalt operations, and its construction materials division?
Thank you, Roy. There will be no impact on our asphalt production or operations or to the materials division profits, as Much has been in business all along, and it's just a change of ownership from AECI to Old Mutual Private Equity and Sphere Holdings. So there should be no effect on us.
... Thank you, Dirk. Our next question is from Ryan Seaborne, from 36 ONE Asset Management. Please, can you give some insights on the Maputo interruptions? And secondly, which border posts would be most profitable for Raubex, and how does the BEE status affect the tender process?
Thank you, Ryan. Yeah, so currently, as the border post has been opened up again, it didn't have a real effect on our operations. It's also only the chrome that we move from Mooihoek mine that goes through to Maputo Harbor. The Kookfontein chrome goes directly to Durban Harbor, so it will had a very little effect on our operations. And it should not have a material cost effect at all. With regards to the second question, obviously, the two biggest ones is the Beitbridge Border Post and as well as the Lebombo Border Post. So we would be very happy if we can secure one of those two and then maybe an additional smaller one with one of those two big ones.
And then I'm not 100% sure with regards to your third part of the question, but look, we are a level one BEE, so it should not have an effect on the tender process.
Thank you very much, Dirk. Our last question is also from Ryan Seaborne. Has your depreciation policy changed given the changes in business model?
Thanks, Ryan. No, there was no change for the other divisions. It's still the same, but on the mining side, a few years back, we've added the units of production, looking at the life of mine and taking that into account.
Thank you very much, Sam. We don't seem to have any more questions, so we'd like to thank you very much for attending today.