Afrimat does well from diversified portfolio

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Afrimat does well from diversified portfolio

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Published Date: 2021-05-28 | Source: Stephen Gunnion | Author: Stephen Gunnion

Afrimat does well from diversified portfolio

The Demaneng iron ore mine was allowed to reopen early in the lockdown while Construction Materials and Industrial Minerals also staged a recovery.

Afrimat has benefitted from its ongoing diversification, delivering strong growth in full-year earnings despite the impact of Covid-19 lockdowns in the first half of its financial year.

The open-pit mining company has three main divisions including Industrial Minerals, Bulk Commodities and Construction Materials. During the year to end-February, it bought the remaining shares in Unicorn Capital Partners, leaving it with 100% of the Nkomati Anthracite mine, which will complement the Demaneng iron ore mine in its Bulk Commodities portfolio and contribute to earnings in the second half of the coming year. It is also in the final stages of the getting the Jenkins iron ore mine, part of the Coza acquisition, up and running.

It recently announced its biggest deal to date, the R650-million acquisition of the Gravenhage manganese mining right and associated assets in the Northern Cape, further diversifying its Bulk Commodities operations.

The company said it entered last year's national lockdown with a very strong balance sheet, positioning it strongly for the uncertainty. The negative impact of the lockdown was dampened by the partial reopening of Demaneng and certain Industrial Minerals operations early during the lockdown period.

In the second half of the year, the Construction Materials segment achieved good growth compared to the corresponding period in the previous financial year, whilst the Industrial Minerals segment experienced what Afrimat said were satisfactory results. The Bulk Commodities segment benefited strongly from favourable iron ore pricing, which contributed to growth in profits during the year.

Revenue for the year rose 12% to R3.7-billion and operating profit jumped 47.5% to R886-million. Headline earnings per share grew by 27% to 441.7c, while net cash from operating activities was 13% higher at R768-million. It used this to reduce net debt to equity ratio to 3.8% from 8.2%. It has declared a final dividend of 112c, taking its total dividend for the year 26.5% higher to 148c per share.

Afrimat's shares closed 0.8% higher at R50.60 yesterday.





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