Reunert (RLO) H1 2026 earnings summary

Executive summary

• Revenue grew 1% year-over-year to R6,309 million, but operating profit declined 23% to R453 million due to margin pressures, weak cables demand, and non-cash share-based payment remeasurements.

• Headline EPS declined 22% to 185cps; basic EPS from continuing operations dropped 24% to 185cps; NAV per share increased 5% to R44.22.

• Applied Electronics delivered strong profit growth, ICT remained resilient, but Electrical Engineering faced significant headwinds from weak infrastructure demand and commodity price spikes.

• Leadership transition completed with new CEO appointed in March 2026, and a focus on disciplined capital allocation and strategic continuity.

• Two value-accretive deals concluded, including the acquisition of Silversoft and a European JV for electronic fuses.

Financial highlights

• Net cash position improved to R383 million (vs. R81 million prior year), with positive free cash flow of R214 million and a final dividend of R468 million paid.

• Capital expenditure totaled R69 million, focused on ICT and Applied Electronics expansion.

• Free cash flow covered the interim dividend 1.5 times.

• Operating margin declined due to lower segment profits and increased ECL provision.

• Dividend yield at 5.9%–6% on a 12-month rolling basis.

Outlook and guidance

• Second half of FY26 expected to improve, with stronger circuit breaker exports, improved Electrical Engineering margins, and continued Defence Cluster growth in Applied Electronics.

• ICT segment projected to accelerate growth, leveraging synergies, recurring revenue, and strategic restructuring.

• Macro environment remains subdued, with South African growth constrained and ongoing global geopolitical tensions.

• Strategic refresh and Capital Markets Day in September to provide further clarity on growth prospects.

• Strong Rand may limit export profitability in H2.