Reunert reports little activity from South Africa's claimed infrastructure investment

REUNERT’S latest financial results reveal a decline in operating profit attributed to continuing low infrastructure investment in South Africa, amidst geopolitical challenges and rising commodity prices.

- EDWARD WEST

The JSE-listed engineering and applied electronics group said Friday in its financial results for the six months to March 31 that its operating profit was impacted by low levels of power cable activity in its electrical engineering segment. Despite this, the group’s interim cash dividend was maintained at 90 cents per share.

“This is evident in the South African gross domestic fixed investment (GDFI) falling to its lowest level in 25 years, at 14% of gross domestic product, as the South African government's stated commitment to infrastructure investment did not translate into tangible activity in the period,” Reunert’s directors, led by chairman Mohamed Husain, said in the results.

They said geopolitical developments in the Middle East had been a notable contributor to recent changes in market conditions, influencing foreign exchange rates, energy prices, supply chains, and overall sentiment, but the full impacts of these developments “are still unfolding.”