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Reunert is pleased to announce our financial results for the half-year ended 31 March 2024, which is an improvement on the comparative period.
Key highlights for H1 FY24 include:
This solid set of results reflects the Group’s continued delivery on our financial, operational and strategic initiatives. The earnings growth was driven by the Electrical Engineering and the Applied Electronics Segment’s Defence Cluster with strong operational performances on the back of improved demand for their products and services.
In the Electrical Engineering Segment both our Power Cable businesses in Zambia and Sout Africa performed well on the back of increased production volumes. These businesses leveraged the increased volumes to generate operational efficiencies, which together with a better product mix in Zambia and lower foreign exchange rate losses, yielded improved margins and a higher operating profit.
The Circuit Breaker business delivered steady product volumes and, positively, increased exports to the USA which offset weaker economic growth in Australia.
The ICT Segment was negatively impacted by South Africa’s macroeconomic conditions, particularly port congestion and disruptions in national ports’ logistics. Our Total Workspace Provider, under the Nashua brand, was unable to resolve the logistics challenges within the reporting period. This resulted in a noteworthy shortfall of imported product, reduced sales and subsequently lower operating profit.
This weakened an otherwise solid performance by the ICT Segment as Skywire, +OneX and Quince Capital all delivered improved results.
The Applied Electronics Segment’s performance was driven by good performances in the Solar Energy business and the Defence Cluster. At the Solar Energy business build rates, margins, solar energy assets under ownership (build-own-operate (BOOs)) and BOO performances all improved. The battery storage business, Blue Nova Energy, secured several large battery storage contracts which is expected to translate into an improved performance in the second half of the financial year.
The Defence Cluster delivered well against the large order book. The increased volumes resulted in improved factory throughput and efficiencies, which together with a good product mix and stable rand-dollar foreign exchange rates yielded improved operating profit margins. The Fuzes, Radar, Secure Communications, Logistics businesses and Etion Create all delivered strong performances. Pleasingly, the cluster maintained its order book levels since 30 September 2023, which provides encouraging visibility on the expected positive financial performance for the remainder of the 2024 financial year and into the 2025 financial year.
Reunert’s Group CEO Alan Dickson said,
“Reunert’s investment case including the three key strategic growth initiatives, namely expanding our ICT Segment’s capabilities, investing into our Renewable Energy ecosystem and increasing non-South African revenue streams, produced steady growth in the first half of 2024.
In the ICT Segment, the intention to form a leading digital integration solutions provider through the merge of +OneX and IQbusiness will grow the Solutions and Systems Integration Cluster’s local and international footprint and deliver solutions that will contribute to the advancement of South Africa’s business and technology services sector.
The renewable energy market is expected to continue to grow as increased private investment in the generation and transmission markets continue. Our internationalisation strategy, underpinned by Defence and Electrical Engineering revenues, provides a significant income stream to augment our South African revenues. These growth initiatives, supported by our solid core businesses, positions Reunert for an improved financial performance in the 2024 financial year over the comparative period.”
The Group CFO, Nick Thomson, stated that:
“The Group’s positive cash generation, which is expected to continue through the second half of the 2024 financial year, together with the unused banking facilities available to the Group plus the cash on hand, provides the necessary financial resources to meet the Group’s operational and strategic initiatives’ requirements and support the dividend.”
The full results presentation and / or webcast will be available after 11h00 on Thursday, 23 May 2024 at https://reunert.co.za/reporting-and-results.php
