Reunert expects a sharp fall in full-year earnings after weak infrastructure demand, delayed defence orders and currency pressure weighed on the South African industrial group.

The JSE-listed company said on Friday that earnings per share are expected to fall by between 47% and 52% for the year ended 30 September 2026. It forecast a range of 282 cents to 312 cents, compared with 590 cents in the previous year.

Headline earnings per share, which exclude certain specified items, are expected to decline by between 44% and 49% to a range of 323 cents to 355 cents. Reunert reported headline earnings per share of 630 cents a year earlier.

The estimates have not yet been reviewed or reported on by Reunert’s external auditors. Audited annual results are expected on or about 23 November.

What hurt the year’s performance

Reunert said weak infrastructure-driven demand in South Africa affected its power-cable businesses. Its Zambian cable operation also faced weaker demand and pressure from a stronger kwacha against the US dollar.

Higher commodity prices squeezed trading volumes and margins, while the stronger rand reduced the translated contribution from export businesses. The group also reported operational challenges at a Nashua-owned franchise.

Delayed customer orders linked to the continuing Middle East conflict and associated supply-chain disruption created further execution constraints.

Reunert estimated that weak demand, currency movements and commodity prices reduced earnings by 146 cents per share. Delayed defence orders accounted for an estimated 51 cents per share, while restructuring and Nashua franchise problems contributed a combined once-off impact of 47 cents per share.

An accounting remeasurement of the group’s employee share-ownership plan had an estimated negative impact of 24 cents per share. Earnings per share were also affected by a R67 million goodwill impairment in the applied-electronics segment. That impairment is excluded from headline earnings.

A stronger order book offers some support

The warning was not entirely negative. Reunert said the applied-electronics order book at 30 September was 25% higher than at the start of the financial year.

Including orders secured after year-end, the company estimates that the order book now exceeds R3 billion. Most of that work is expected to be executed during the 2027 financial year.

Reunert also said its balance sheet remains strong, supported by cash generation during the year and cash balances broadly in line with the prior period.

The order book points to future work, but it is not the same as revenue already earned. Execution timing, costs and contract performance will determine how much ultimately reaches the income statement.

What investors should watch

The audited results should show how the pressures were distributed across Reunert’s cable, information-technology and applied-electronics operations. Investors will also be watching for cash-flow detail and management’s view of infrastructure demand, export conditions and order execution in the new financial year.

For now, the company’s guidance indicates a materially weaker 2026 result, while the larger applied-electronics order book provides a possible base for recovery rather than a guaranteed turnaround.

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