Afrimat reports 92.3% increase in headline earnings amid operational improvements

Afrimat, the mid-tier industrial minerals mining group, increased headline earnings substantially by 92.3% to 101.9 cents in the six months to August 31 after measures to fix its cement business gained traction and it sold much greater iron ore volumes.

“The group made several key improvements, and the results are becoming tangible,” said the CEO, Andre van Heerden. The cement business saw a big increase in sales but did not yet make a profit due to kiln reliability factors, while phosphate sales also did not translate into profits because the business was still being built up, said the CFO, Pieter de Wit, in an interview.

Group revenue increased by 29.9% to R 5.3 billion. The interim dividend was doubled to 20 cents a share. Operating profit was up 29.8% to R 379.8 million.

“The focus was on meticulous operational execution to ensure Afrimat unlocks the full potential of its diversified asset base. The troubled Lafarge South Africa assets that we recently acquired have now been fully integrated into our structures, and good progress has been made with the turnaround of these businesses,” said Van Heerden.

The cement operations have currently reached break-even, said De Wit.

Local iron ore sales saw volumes increase sharply to 830 662 tons from 339 648 tons. Iron ore export volumes increased to 396 384 tons from 349 084 tons.

Van Heerden said full-year volumes were expected to be similar to the previous year, about 17% below Afrimat’s yearly allocation of 870 000 tons per annum, primarily due to logistics availability on the Saldanha export line as a result of a maintenance shutdown of the line in the second half.

The Bulk Commodities division increased revenue and operating profit by 53.6% and 56.8%, respectively. The iron ore mines’ revenue increased by 77.9% to R1.7 billion.

Operational improvements at Nkomati Anthracite Mine were implemented, and the mine processed 100,000 tons in July 2025. The underground mining operation was mothballed after an assessment. Due to decreased demand from ferrochrome smelters, volumes fell to 136 216 tons from 155 686 tons. De Wit said that with all the smelters now closed, and no certainty whether they would reopen, new markets were being sought offshore.

In the aggregates segment, product availability standards and customer service were elevated, which led to better sales volumes, with an increase in market share - this was visible towards the end of the second quarter after the excessive rainfall in the first quarter.

Despite group finance costs increasing to R 148.4m, every effort was being made, including the sale of non-core and unprofitable assets, to ensure debt was settled as quickly as possible. The debt:equity position was 52.5%, a marginal increase over the figure at the end of February 2025.

Taxed profit improved by 78.9% to R 173.5 million. Cash generated improved significantly to R357.7m compared to cash used in operations of R 131.4m in the previous comparable period.

The aggregate and ash components of the Construction Materials segment were affected by excessive rainfall in the north of South Africa in the first quarter. During the second quarter, sales volumes improved. This momentum was expected to continue into the second half, said Van Heerden.

Revenue of the aggregates and fly-ash division grew by 9.1% to R 1.9bn, while the operating profit grew to R 321.2m from R 290.1m. Revenue for the cement business rose 118.8% to R 873.7m, but it was loss-making at the operating profit level - there were fewer production disruptions at the end of the period.

Van Heerden said Afrimat was well-positioned to benefit from government and private sector infrastructure projects and building initiatives across the borders.

Domestic iron ore sales were expected to be slightly lower in the second half due to the closure of AMSA’s Newcastle operation, but overall better than the previous year.

International iron ore sales are projected to remain at similar levels. Van Heerden said they hoped that no further erosion of industrialisation would occur in South Africa.

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