Afrimat FY HEPS jumps 24%

Afrimat, a mid-tier mining and materials company, has reported a robust performance in the past year, with CEO Andries van Heerden highlighting the success of their diversification strategy. Van Heerden pointed out that their investments in iron ore, phosphate, and anthracite businesses have paid off significantly, with a notable recovery in their anthracite mine. Additionally, their construction materials segment saw a substantial improvement in operating profit, more than doubling year on year. One of the key developments for Afrimat in the upcoming year is the acquisition of Lafarge South Africa, which has received approval from competition authorities. The integration of Lafarge's quarries and fly ash business into Afrimat's operations is expected to enhance their presence in the market. However, Van Heerden acknowledged the challenge of turning around Lafarge's cement business, which is currently incurring losses. Despite this, he remains optimistic about the overall growth potential of Afrimat's construction materials business. In line with their strategy of diversification, Afrimat has also ventured into future metals and minerals, acquiring assets like Glenover to tap into the demand for rare earth elements used in electric motors. While the market shows interest in green metals like copper, Afrimat's focus remains on prudent acquisitions and greenfield opportunities that offer sustainable growth prospects. Van Heerden also shared insights on the construction sector in South Africa, noting a gradual recovery in activity, particularly in road building and rail infrastructure. He highlighted the maintenance backlog in these sectors and expressed confidence in the demand for their products amidst ongoing infrastructure projects by entities like SunRail and Transnet. Speaking of Transnet, Afrimat faced challenges in transporting their products due to the rail crisis. However, Van Heerden acknowledged the positive changes in Transnet's management and their commitment to improving rail operations. While the impact of these changes may take time to materialize, Afrimat is optimistic about the collaborative efforts to address logistical challenges and enhance operational efficiency. With a strong financial performance and strategic initiatives in place, Afrimat is poised for further growth and resilience in the competitive market landscape.