Reunert expects earnings decline due to deferred contracts and Blue Nova

Reunert (JSE: RLO) anticipates a substantial decrease in its interim financial results, with EPS projected to be between 201 cents and 217 cents, a 25%-30% drop compared to the ZAR289 cents reported in the prior corresponding period. HEPS is expected to fall between 19% and 24%, landing between 219 cents and 235 cents, down from the previous ZAR289 cents. The decline is attributed to several factors, including the deferral of a key defense contract, lower cable sales in South Africa, and the decision to dispose of its battery storage business, Blue Nova Energy, which will be classified as a discontinued operation. The impact of the Blue Nova decision on HEPS and EPS is estimated at 11 cents and 34 cents, respectively. Additionally, the prior period benefited from a ZAR32 cents non-recurring positive impact from a COVID-19 business interruption claim, which did not repeat this period. EPS from continuing operations (excluding Blue Nova) is expected to be between 235 cents and 250 cents, a decrease of between 16% and 21%. The Group's other businesses performed in line with expectations.