Cape Times

Afrimat forecasts brighter future as earnings jump

- EDWARD WEST edward.west@inl.co.za

AFRIMAT chief executive Andries van Heerden is bullish about the prospects for the industrial materials and bulk commodity mining group’s 2022 financial year.

The group yesterday reported a 27 percent increase in headline earnings per share to 441.7 cents for the year to February 28. A final dividend of 112c per share was declared, up 38 percent on the payout last year.

The net debt:equity ratio improved to 3.8 percent from 8.2 percent. Net cash from operating activities was up 13.4 percent to R767.6 million.

The share price was up 2.6 percent to R51.50 yesterday morning, bringing to 66 percent the increase in the price over the past year. The share closed at R50.60 on the JSE.

Van Heerden said in an interview that the bulk commoditie­s division was benefiting from high iron ore prices. “While above $60 (R822) a ton is good for us, the price is currently around $200 a ton. Last week, it reached $225 a ton,” he said.

The Nkomati anthracite mine acquired towards the end of last year was coming into production, while the newly acquired Jenkins iron ore mine was expected to come into production “in the next month or two”, with an anticipate­d off-take for the local market.

In the constructi­on materials division, operating profit in the second half of the past financial year had been 45 percent above the same pre-Covid period a year before.

This was indicative of how the building materials market was at present, he said. They had seen renewed tender activity from the likes of Sanral and provincial government­s, and long awaited infrastruc­ture spending plans appeared to be gaining momentum.

The industrial minerals division had experience­d a 6 percent decline in operating profit in the past year because of challenges in the glass and steel-making sectors, but these challenges had since been overcome and the division was “running hard now”.

In the contractin­g services division, efforts were being made to recover from five years of work on a contract in Mozambique that had gone sour.

Van Heerden said that in the past year any disruption caused by the pandemic had been swiftly countered by Afrimat’s hands-on management team.

The constructi­on materials and industrial minerals segments had returned to profitabil­ity once the lockdown levels were lifted. Post-year-end, the group furthered its diversific­ation strategy with its biggest deal to date, the R650m acquisitio­n of the Gravenhage manganese mining right and associated assets in the Northern Cape.

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