Afrimat’s headline earnings per share is expected to fall 13% to 18% for the year to February 28, but the mid-tier mining group remains debt free and well capitalised to be able to execute its growth strategy.
The share price slipped 2.89% to R49.90 yesterday afternoon, some 27% below the R66.60 that it traded at a year ago.
The construction materials, industrial mineral and bulk commodities mining group said in a trading statement yesterday that earnings per share were expected to decrease by between 15% and 20% compared to 560.7c for the year ended February 28, 2022.
Headline earnings per share were expected to be between 445.2c and 472.3c, representing a decline of between 13% and 18% compared to 542.9c for the last financial year.
The group said, however, that it and its subsidiaries remained “highly profitable, albeit at slightly lower levels than the previous year”.
New growth projects the Jenkins iron ore mine and Nkomati anthracite mine contributed well to the results and were ready to increase volumes in the coming financial period.
Plans to ramp up the anthracite operation were progressing well.
“This is a purposeful strategy to support diversification across the bulk commodities segment in product and income streams,” the group said.
The Demaneng iron ore mine continued to produce ore for export, in line with its export allocation on the Saldanha rail line and with the allocation of trains from Transnet becoming more consistent.
Increased volumes from Nkomati and Jenkins, which were not exposed to volatile pricing, were a buffer for the group against potential downturns in export iron ore prices.
The construction materials and industrial minerals segments were affected by the economic slowdown and cost reductions, and efficiency improvements were under way.
“The operating environment in South Africa remains challenging, but Afrimat continues to see value in its diversification strategy. The structural decline in the public sector’s contribution to fixed investment and infrastructure remains a concern,” the group’s directors said.
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