Reunert profit grows as customers look for renewable energy
Wednesday, 22 November 2023
The ICT and electronics group is one of the few that has benefited from ongoing load-shedding
Reunert cashed in on the demand for renewable and alternative energy sources, including in SA where rolling blackouts continue and problems persist at state-owned power utility Eskom, as the ICT and electronics group reported a rise in annual profit.
“These large-scale investments also benefit the group’s power cable business. The investment required into the upgrade of the country’s transmission system will further bolster the group's participation in the renewable energy market,” the company, valued at about R11.4bn on the JSE, said on Wednesday in its results for the year to end-September.
“The storage business grew strongly this year and the large-scale containerised storage solutions, which form a critical component of the country’s renewable energy needs, reached scale and will underpin the growth in this business going forward,” it added.
SA, the group’s largest region by revenue, is expected to continue its investment into renewable energy in the medium term, supporting the volumes of Reunert’s power cable volumes.
The company, founded in 1888 and listed on the local bourse in 1948, manages businesses in the electrical engineering, ICT and applied electronics space, and primarily operates in SA.
The electronics company is one of a handful of companies that has done well because of load-shedding given its investments into renewable energy and supply contracts with the power sector.
Revenue increased 23.8% year on year to R13.8bn and operating profit improved 16.2% to R1.4bn.
Profit rose 13.6% to R959m and headline earnings per share (HEPS), a common profit measure in SA that excludes certain items, advanced 16% to 602c.
The total dividend declared for the year was up 11% to 332c per share.
Electrical engineering was the group’s largest segment by revenue, generating 51.9%, followed by applied electronics (25.8%), ICT (22.2%) and the rest coming from other categories.
SA remained the largest region by revenue with 70.8%, then the rest of Africa (15.1%), and the rest coming from Asia, Australia, Europe and other regions.
Looking ahead, the company is expecting to be bogged down by the struggling local economy and does not see it improving in the first half of its new financial year, putting “pressure on our key customer segments”.
But it added that it will grow as the “timing of defence export deliveries and large cable contracts bias growth towards the second half of the 2024 financial year”.