Mid-tier mining and materials company Afrimat expects full-year headline earnings to fall as much as 90% as changes in the iron ore market severely affected the group.
Headline earnings per share (HEPS) for the year ended February are expected to be between 56.7c and 85.1c, representing a decrease of 85%-90%, it said in a trading statement on Wednesday.
Changes in the iron ore market, given the rand value received on iron ore exports and the volume reduction from ArcelorMittal SA in the first half of the financial year, severely affected Afrimat.
Losses from cement and weaker-than-expected performance from anthracite also hindered performance, the group said.
“Substantial work was done to ensure a strong foundation for sustainability and returned performance for the next financial year, financial year 2026,” Afrimat said.
In its construction materials division, Afrimat’s most recent acquisition, Lafarge SA, has successfully been integrated into the company.
The strong performance from the traditional aggregate quarries and ash business will ensure that the aggregates segment achieves a better result than last year.
The cement operations were successfully revitalised and are now functioning at acceptable levels. Afrimat is regaining market share, and the trend remains positive, it said.
The cement kilns had benefited from extensive maintenance and were operating both efficiently and dependably, ensuring that Afrimat could operate with backup capacity. The industrial minerals business has significantly recovered and is returning to its previous performance, Afrimat added.
“The ongoing suspension of load-shedding and optimistic signs of economic growth bode well for this business and its customers.”
Nkomati’s results improved towards the end of the reporting period. No anthracite products were exported in the latter half of the financial year due to the closure of the border with Mozambique, which restricted access to the Maputo port, Afrimat said. That led to a delay in export shipments.
The border has since reopened, and Afrimat has secured commitments for up to 80% of the new financial year’s export volume.
Despite maintaining export iron ore volumes consistent with the prior financial year, and maintaining a positive relationship with its marketing partner, persistent rail inefficiencies continue to hinder performance. “Consequently, actual volumes remain 20% below Afrimat’s allocated rail capacity. Furthermore, international iron ore prices have remained lower than last year's comparative period.”
Local iron ore volumes suffered a 70% retraction in the first quarter of due to significantly reduced volumes taken up by Amsa. However, volumes recovered well for part of the second quarter, Afrimat said, and continued across the second half. Afrimat remained in active discussions with Amsa to supply them with innovative raw material solutions to support their long-term sustainability, it said.
With the expanded environmental impact assessment in place, flexible mining at Nkomati would make a meaningful difference, supported by the strategic changes that have been implemented, Afrimat said.
The construction materials segment was benefiting from strong aggregates performance and encouraging margin recovery while steadily reducing cement losses. Management remained confident that the majority of the company’s metrics had turned and boded well for a better financial result in the coming year, it said.
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