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Afrimat results reflect strength of diversification and entrepreneurial ethos


– Group revenue up 24,6% to R3,0 billion
– Headline earnings per share (“HEPS”) up 29,6% to 234,1 cents
– Operating profit margin 15,9%
– Final dividend per share of 62,0 cents
– Return on net operating assets 25,4%
– Net debt:equity ratio improved from 35,5% to 23,8%

23 May 2019 – Afrimat, a leading open-pit mining company providing industrial minerals, commodities and construction materials, today released full year results for the year ended 28 February 2019. Group CEO, Andries van Heerden, said he was very pleased with the overall performance, adding that the group continues to deliver excellent results supported by its diversification strategy.

Afrimat’s entry into bulk commodities two years ago proved to be well-timed, contributing handsomely to the sustained earnings growth. Afrimat has maintained a compound average growth rate of almost 20% per annum for the last decade through a well thought-through diversification strategy. Healthy international iron ore prices turned the recently acquired Demaneng iron ore mine into a star performer.

Van Heerden added that the Industrial Minerals segment performance was strong in the second half of the year although a slow first half resulted in the full year performance to be marginally weaker than the previous year.

“Political uncertainty and economic slowdown experienced during the last quarter of the previous financial year continued during the reporting period and impacted the Construction Materials businesses the most. “Nevertheless, our entrepreneurial approach, the diversified product range, our strategic positioning and excellent service delivery all combine to ensure that Afrimat is able to weather the storm, and to a large extent this has insulated us from the prevailing conditions, for which we are thankful. However, our Bulk Commodities segment, consisting of the Demaneng iron ore mine, contributed positively to our results, offsetting lower performance from Construction Materials.”

Van Heerden added that the group will continue to focus on its strategy to ensure the group remains a profitable and sustainable entity into the future, adding that new business development remains a critical element of the growth strategy. “Our business development team continues to successfully identify and pursue opportunities in existing markets, as well as in anticipated new high-growth areas in southern Africa.”

From a B-BBEE perspective, existing BEE shareholders and the Afrimat BEE Trust in aggregate hold 32,6% of Afrimat’s issued shares. “Notwithstanding the fully empowered ownership platform in line with the Mining Charter requirements, we are dedicated to enhancing all aspects of B-BBEE on an ongoing basis. We’re committed to a bottom-up approach to transformation and have had a successful year in terms of sustained training, skills development and all-round employee upliftment.”

Financial results

Headline earnings per share increased 29,6% from 180,7 cents to 234,1 cents per share.

Net cash from operating activities increased by 46,4% to R410,5 million (excluding once-off employee-related accruals of R79,5 million, in relation to the Afrimat BEE Trust, paid in the prior year), which resulted in a healthy decrease of the net debt:equity ratio from 35,5% in the prior year to 23,8% in the current year.

In line with the group’s dividend policy, which is to maintain a 2,75 times dividend cover, a final dividend of 62,0 cents per share (2018: 42,0 cents) was declared on 22 May 2019, bringing total dividends for the year to 81,0 cents per share (2018: 62,0 cents per share).

Operational review

“All our operating units are strategically positioned to deliver excellent service to our customers, acting as an efficient hedge against volatile local business conditions. The product range is well diversified to include aggregates and concrete-based products as construction materials and limestone, dolomite and silica as industrial minerals as well as iron ore as bulk commodities.”

Van Heerden also indicated that labour relations continued to be satisfactory during the period under review, with no labour action having occurred during the year. “Afrimat remains committed to creating and sustaining harmonious relationships in the workplace and addressing issues proactively.”

The Demaneng iron ore mine, delivered an exceptional contribution to group results. The business completed the recommissioning of both its dense media separation (“DMS”) plants during the first half of the year and completed the expansion of the load-out facility, reaching stable production volumes during the second half of the year. The business also experienced favourable pricing towards the latter part of the current year.

Industrial Minerals businesses across all regions delivered solid results, although the impact of the economic slowdown in the construction sector was experienced by the Lyttelton mine.

“As indicated before, it was our Construction Materials segment that felt the brunt of the slowdown in economic activity, with the KwaZulu-Natal and Gauteng businesses being impacted the most.”

Van Heerden said that the KwaZulu-Natal business had successfully completed a restructuring process during the year to improve the business, whilst the Western Cape aggregates business continued to deliver solid results.

The Emfuleni Clinker Ash Dump, situated in Vereeniging and close to Afrimat’s customers, will ensure an additional three to four-year lifespan for the Clinker business, with Clinker continuing to investigate further options in order to secure additional resources for the group.

In Mozambique, the business mainly supplied construction materials to a resettlement village in the north of the country and is well positioned to benefit from the main project which is expected to commence imminently.


“The group is well positioned to capitalise on strategic initiatives. We foresee continued growth from an excellent asset base, and expect further expansion of our range of unique products. We also believe that our process of making selective acquisitions will deliver good results.”

In line with this, and following the financial year-end, Afrimat announced on SENS on 8 April 2019 that it had made a non-binding indicative offer (“NBIO”) to purchase the entire issued share capital of Universal Coal plc (“Universal”), which is listed on the Australian Stock Exchange with operations in South Africa, for a maximum purchase price of A$0,40 for each Universal share held. The NBIO is subject to various conditions precedent, including the completion of a due diligence, the finalisation of financing arrangements, and board and shareholder approval in respect of the proposed transaction. The due diligence is currently underway.

In wrapping up, Van Heerden said that operational efficiency initiatives aimed at expanding volumes, reducing costs and developing the required skill levels across all employees, remains a key focus in all operations. “We expect the current business climate to continue with the group’s future growth driven by the successful execution of our proven strategy, recent acquisitions and wider product offering.”


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