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Afrimat reports record results driven by diversification and efficiency – supported by an entrepreneurial culture


– Headline earnings per share (‘HEPS’) up 48,5% to 347,7 cents
– Group revenue up 11,4% to R3,3 billion
– Operating profit margin 18,2%
– Return on net operating assets 30,9%
– Net debt:equity ratio improved from 23,8% to 8,2%

21 May 2020 – Afrimat, a leading open-pit mining company providing industrial minerals, commodities and construction materials, today released full year results for the year ended 29 February 2020, reporting record results. Andries van Heerden, group CEO, said the exceptional results are a product of a healthy entrepreneurial company culture, supported by the diversification strategy and consistent efficiency improvement initiatives. This resulted in improved earnings generated by all three operating segments, contributing to the pleasing results in a very difficult economy.

The company has consistently delivered pleasing financial results, maintaining a compound average growth rate in headline earnings per share of 21,6% per annum for 11 years since the end of the global financial crisis. This has resulted in a business with a very strong balance sheet, bolstering its ability to weather storms and preparing it to benefit from opportunities that may present themselves in the aftermath of the Covid-19 crisis.

“Our relentless drive to find talent and to develop it, especially amongst our youngest employees, has played a significant role in the group’s performance over the last decade and has formed a cornerstone of our transformation strategy. Our growth strategy creates a pipeline of opportunities with the team dedicated to new business development, which continues to successfully identify and pursue opportunities in existing markets, as well as in anticipated new high growth areas,” he added.

The board decided not to declare a final dividend at this stage. Van Heerden said that the decision supports the group’s general conservative nature and ensures the further preservation of cash, which is desirable due to the uncertain nature of the current economic climate. He added that Afrimat is seeing an increase in opportunities that could justify a cash investment, which in turn are expected to deliver excellent returns, but he also warned that the full impact of Covid-19 is currently unknown and that this requires prudent cash management.

The Afrimat group remains committed to creating and sustaining harmonious relationships in the workplace and addressing issues proactively. “Good labour relations continued during the year under review, with no labour action having occurred.”

Financial results

External revenue improved by 11,4% from R3,0 billion to R3,3 billion. Operating profit increased by an impressive 27,5% from R471,2 million to R601,0 million, principally due to an improvement across all three business segments, including an excellent performance by the Bulk Commodities segment.

Headline earnings per share grew by 48,5% from 234,1 cents per share to 347,7 cents per share. Net cash from operating activities increased by 64,9% to R676,8 million, which resulted in a decrease of the net debt:equity ratio from 23,8% in the prior year to 8,2% in the current year.

Operational review

Van Heerden said that all of Afrimat’s operating units are strategically positioned to deliver excellent service to customers, whilst acting as an efficient hedge against volatile local business conditions. The product range is well diversified to include aggregates and concrete-based products to support Construction Materials, with limestone, dolomite and silica making up Industrial Minerals, as well as iron ore as Bulk Commodities.

The Bulk Commodities segment, consisting of the Demaneng iron ore mine, delivered an exceptional contribution to the results, at 31,4% of revenue. The operating profit of this segment increased by 59,8% from R201,3 million to R321,7 million as a result of an impressive increase in volumes and favourable pricing across the year. This translated into an increase in the operating margin from 29,5% to 31,0%.

Industrial Minerals businesses across all operating regions delivered strong results, with the segment’s operating profit increasing by 22,5% from R78,0 million to R95,6 million, which resulted in an operating profit margin improvement from 14,3% to 17,3%. The strong growth is attributable to these businesses successfully entering new markets, increasing volumes, reducing costs and implementing efficiency improvements.

After a slowdown in Construction Materials in the prior year, the segment delivered a marginal recovery, with operating profit increasing by 1,2% to R192,4 million. The operating margin improved slightly from 10,9% to 11,2% for the year. The KwaZulu-Natal business reported improved results following a successful restructuring process during the prior year, while the Western Cape aggregates business continued to deliver solid results.

In Mozambique, the business continues to supply construction materials to projects in the north of the country, in the ramp-up to the major LNG project. The Gauteng business continues to bear the brunt of a slowdown in the economy.


Afrimat entered the Covid-19 lockdown, which started a month after this reporting period, with a very strong balance sheet, positioning it strongly for the uncertain and volatile business climate, which is expected to continue for the immediate future.

“Fortunately, the impact of the national Covid-19 lockdown was dampened by the partial reopening of Demaneng iron ore and certain Industrial Minerals operations early in the lockdown period. The re-opening was done giving the utmost care to ensure the safety and well-being of all employees.”

Van Heerden explained that from 20 April 2020, as gazetted by Government, industries in the mining and quarrying sector were granted permission to resume operations. “We are ramping up operations according to market demand and in line with the regulations. Critical staff, able to work from home, did so and will for the foreseeable future. These are unprecedented times and the situation is being monitored daily. The economic future of South Africa is in a precarious balance, with Government and the private sector needing to work together more so than ever before.”

“We are, however, well positioned to capitalise on strategic initiatives and future opportunities, such as Government’s infrastructure programmes, which are expected as post Covid-19 economic stimulus
initiatives. The group’s future growth will still be driven by the successful execution of our proven strategy, recent acquisitions and a wider product offering to the market, and we will continue to prudently manage cash flow and ensure debt remains at low levels. Operational efficiency initiatives aimed at expanding volumes, reducing costs and developing the required skill levels across all employees, remain a key focus in all operations.”


Issued for: Afrimat Limited
Contact: Andries van Heerden, Chief Executive Officer (CEO)
Tel: 021-917-8853

Account: Keyter Rech Investor Solutions
Contact: Vanessa Rech
Tel: 087-351-3814 or 083-307-5600

Tanya Pretorius

Afrimat: Head of Communications

Vanessa Ingram

Keyter Rech Investor Solutions