Afrimat well positioned for economic rebuild

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Afrimat well positioned for economic rebuild

Published Date: 2020-05-22 | Source: Stephen Gunnion | Author: Stephen Gunnion

Afrimat well positioned for economic rebuild

The construction materials and bulk commodities producer says it is ready to capitalise on government infrastructure programmes aimed at stimulating the economy.

Afrimat says its diversification strategy and a focus on costs and efficiencies have resulted in an 'exceptional' full-year performance, with all three of its operating divisions contribution to record results. And it says it is well positioned to capitalise on strategic initiatives and future opportunities, such as government infrastructure programmes which are expected to be implemented to stimulate the economy once the virus has run its course.

Afrimat said it benefitted from a well diversified product range last year, including aggregates and concrete-based products in its Construction Materials segment, and limestone, dolomite and silica in Industrial Metals. Bulk Commodities, consisting of the Northern Cape-based Demaneng iron ore mine it bought in 2017, contributed close to a third of group revenue, while lifting its contribution to group operating profit by 60% to R322 million due to a significant increase in volumes and favourable iron ore pricing. Industrial minerals grew operating profit by 23% to R78 million as it entered new markets and reduced costs. And after a slowdown in Construction Materials the prior year, the segment increased operating profit by 1.2% to R192 million.

For the group as a whole, revenue rose 11% to R3.3 billion in the year to end-February and operating profit increased by 28% to R601 million. Headline earnings per share improved by 49% to 347.7c. It cut its net debt to equity ratio to 8.2% from 23.8%. After paying an interim dividend of 36c per share, it has postponed its decision on a final dividend for the time being. It paid a total dividend of 81c last year.

Afrimat's shares rose 4.4% to R26.31 yesterday.





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