JSE-listed Reunert posted a 23% decrease in operating profit to R453-million during the six months to March 31, 2026.

The group’s operating profit was adversely affected by non-cash IFRS 2 share-based payment remeasurements linked to the group’s employee incentive schemes.

Reunert’s group revenue increased by 1% to R6.3-billion.

The company also reported a stable free cash flow of R214-million, from R211-million in the prior corresponding period, while net cash improved significantly to R383-million, from R81-million.

Amid a materially evolving operating environment, shaped by global macroeconomic shifts and heightened geopolitical activity, Reunert remained resilient, supported by its diversified portfolio, disciplined execution and strong operational management, said Reunert Group CEO Anthonie de Beer.

“Reunert’s diversified portfolio and strong management teams continue to support the group’s resilience in a volatile and rapidly changing operating environment. While macroeconomic and geopolitical conditions remain challenging, the group has continued to demonstrate disciplined execution, strong cash generation and operational agility.”

Reunert Group CFO Mark Kathan added that the group’s balance sheet remained robust with a significantly improved net cash position of R383-million and available funding facilities of R2.9-billion.

He pointed out that positive free cash flow generation remained stable despite lower profitability and increased working capital requirements arising from higher commodity prices.

“Our disciplined approach to capital allocation, cost management and liquidity continues to support the group’s operational and strategic objectives while enabling sustainable shareholder returns,” he said.

Reunert’s strategic positioning, particularly in Applied Electronics and selected ICT businesses, provides a solid platform for sustainable growth, while the company’s balance sheet strength and prudent capital allocation ensure that the group remains well positioned to pursue value-enhancing opportunities.

“We are encouraged by the continued momentum in Applied Electronics, the operational improvements within ICT and the strategic internationalisation initiatives underway. At the same time, we remain focused on navigating the difficult conditions in the Electrical Engineering segment and positioning these businesses for improved performance as infrastructure investment activity recovers,” De Beer commented.

The ICT and Applied Electronics segments delivered robust performances during the period under review, achieving strong growth through disciplined execution on a healthy order book.

However, the Electrical Engineering segment was impacted by weaker infrastructure investment in South Africa and Zambia, significant foreign exchange volatility and record-high commodity prices.

During the six months to March 31, the Electrical Engineering segment reported strong export demand into the US, supporting circuit breaker volumes, while the Zambian and South African power cable businesses faced difficult trading conditions.

“Reduced infrastructure investment activity, subdued demand from municipalities and delays in transmission grid recapitalisation negatively impacted local cable volumes,” Reunert noted.

Further, in Zambia, the appreciation of the Zambian kwacha against the US dollar, as well as significantly higher copper prices, placed additional pressure on margins and customer demand.

In the ICT segment, the Business Communication cluster delivered solid growth as demand for enterprise connectivity and last-mile broadband services remained robust.

Nashua maintained a resilient performance supported by recurring revenues and complementary technology solutions.

“The Rental-based Finance cluster continued to deliver high-quality earnings through strong credit discipline and collections performance, while the Solutions and Systems Integration Cluster improved operational efficiency following restructuring initiatives implemented in the 2025 financial year,” the company said in a media statement on Friday.

Further, iqbusiness expanded its focus on digital lifecycle services, including cloud, data and AI-enabled solutions.

Post the first-half reporting period, iqbusiness entered into agreements to acquire the Silversoft group businesses in South Africa and the UK, expanding Reunert’s capabilities in enterprise software and digital solutions.

Meanwhile, the Applied Electronics segment delivered a strong improvement in profitability driven by excellent execution.

“The fuze business benefited from improved production efficiencies and strong export order execution, while the radar business continued to make excellent progress on strategic intellectual property codevelopment programmes.”

Following the reporting period, Reunert entered into agreements to establish a strategic electronic artillery fuze manufacturing capability in Slovakia through a partnership with CSG.

This initiative represents a significant internationalisation milestone for the Applied Electronics segment and strengthens the group’s long-term growth platform in Europe.

Within Renewable Energy, the solar energy business experienced a weaker first half owing to delays in site readiness and adverse weather conditions affecting building schedules.

“Despite this, the business delivered solid energy sales from build-own-operate assets. Apollo Africa continued to advance its wheeling business pipeline and achieved key commercial milestones on both supply and offtake agreements.

“Looking ahead, the group expects improved performance from the Electrical Engineering segment supported by a stronger order book, while the ICT segment is anticipated to benefit from restructuring efficiencies and refreshed go-to-market strategies. Growth in Applied Electronics is expected to remain stable amid continued global demand growth,” the company said.

“The group’s strategic refresh is focused on sharper execution, disciplined cash management and prioritising businesses with the strongest long-term value creation potential,” De Beer concluded.

During the six months ended March 31, Reunert declared gross interim cash dividend of 90c an ordinary share, payable from retained earnings. The net dividend for non-exempt shareholders is 72c a share after 20% dividend withholding tax.