Home » After exiting Australia, WBHO gets boost from SA’s roadworks drive | Business

After exiting Australia, WBHO gets boost from SA’s roadworks drive | Business

  • Construction group WBHO says the market for commercial property development in SA remains positive, while it’s benefiting from new road contracts.
  • The company has secured R4.7 billion in new road projects in SA, pushing up its order book by almost a fifth over six months.
  • But SA’s infrastructure drive generally is struggling to gain traction, and its civil engineering division remains under pressure.
  • For more financial news, go to the News24 Business front page.

Construction group WBHO – which has exited the Australian market after incurring heavy losses there in recent years – has seen its order book boosted by a strong pipeline of road projects in South Africa.

WBHO said on Tuesday it had secured R4.8 billion in new road projects from the South African National Roads Agency (Sanral), which last year cancelled four tenders worth more than R10 billion, while another almost R7 billion contract lapsed, amid concerns that procurement policies were not properly followed.

These wins have pushed the group’s total order book to R26.5 billion as of end-December – a 19% increase from six months before. Further, WBHO said its roads and earthworks division “has continued to secure sizeable new projects” in recent weeks.

READ | Sanral to readvertise almost R18bn in tenders as Mbalula vows he can’t be bought

After pulling the plug on its Australian business, two-thirds of WBHO’s order book now sits in SA, with the rest made up of projects elsewhere on the continent and in the UK.

In the six months to end-December 2022, the group made a net profit of R337.7 million, compared to a loss of R1.3 billion a year before.

READ | WBHO dragged into a loss by woes down under

WBHO said on Tuesday that the South African buildings market, which refers mainly to commercial property developments, “remains positive in all regions”.

“In Gauteng, the [buildings] division has a strong baseload of work in key sectors with opportunities for sizeable new phases and additional works on a number of these projects.”

The division is seeing opportunities in data centre construction in the province, as well as commercial and residential developments.

The division’s order book in the Western Cape “remains robust”, while the industrial building and warehousing market is driving activity in KwaZulu-Natal.

However, with SA’s infrastructure programme still struggling to gain traction, order book levels within the civil engineering division “remain under pressure despite a reasonable pipeline of future work”.

In this segment, the mining infrastructure and renewable energy sectors are expected to account for the bulk of activity over the next 12 months.

The civil engineering division recently secured a contract to manufacture concrete towers for a windfarm in the Northern Cape, and it expects “further opportunities for this type of work”. Wind towers are usually manufactured using steel.

Meanwhile, WBHO said it had been awarded a contract related to Total’s large-scale gas project in Mozambique, “which may be a precursor to the resumption of the main works later in the year”. The project has been on hold due to a violent insurgency in the area.

“Based on the current work on hand and near-term opportunities, the outlook for the African operations indicates a healthy growth phase, while the outlook for the UK operations remains positive,” WBHO said.

“Improved market sentiment in general, is translating into consistent new work procurement and a noticeable increase in available construction opportunities in several of the group’s key geographies.”

WBHO’s shares were up 0.78% to R100.79 in late morning trade on Tuesday but have fallen 11% since the start of 2022.

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