Mid-tier mining and materials company Afrimat says falling iron ore prices and the underperformance of SA’s export rail lines resulted in annual earnings plunging.
Headline earnings per share (HEPS) fell to 72.3c for the year to end-February from 567.3c in the previous year, while operating profit fell by nearly 60%.
The group declared a final dividend per share of 15c.
The weaker financial performance was primarily driven by Afrimat’s iron ore mines, which recorded a near-70% drop in operating profit as rail challenges suppressed export volumes.
Weighed down by weak prices and logistics constraints, the iron ore mines saw a “large industrial customer” reducing offtake in the first half, said the company.
Outside iron ore, the group’s cement business faced challenging conditions, incurring losses of R285.4m for the year.
According to CEO Andries van Heerden, reliability issues at the cement factory resulted in excessive maintenance costs and limited production, but the unit has since been restored.
Added to this was a dip in sales of anthracite as Mozambican border closures brought on by post-election protests prevented the group from exporting anthracite products in the second half.
In terms of revenue, logistics constraints and weak prices were offset by the group’s recent acquisition of Lafarge SA, the company’s largest acquisition to date.
The addition of Lafarge became unconditional during the quarter to end-May, resulting in revenue increasing 36.7% year on year to R8.3bn.
However, the debt taken on to fund this acquisition resulted in significant finance costs, further weighing on HEPS.
Reflecting on the latest results, Van Heerden emphasised the importance of domestic iron ore sales in the group’s offering.
“We remain in active discussions with our customer to supply it with innovative raw material solutions to support its long-term sustainability,” he said.
“We also continue to engage with Transnet and participate in the Ore Users’ Forum to assist Transnet as much as possible, and we are encouraged by the private sector participation projects that are progressing at government level.”
The group said it looked forward to “leaving the 2025 financial year behind”, pinning its hopes on stronger results in the coming years.
“While these results are not as robust as in the past, the entrepreneurial culture continues to ensure sustainability and profitability through strategic focus, careful planning, and meticulous execution,” said Van Heerden.
“Substantial work was done to ensure a strong foundation for sustainability and to ensure improved performance in the next financial year.”
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