Afrimat (AFT) H1 2025 earnings summary

Executive summary

• H1 FY2025 revenue rose 44.3% to R4,103.4m, including Lafarge; HEPS fell to 53.0 cents from 263.4 cents amid iron ore headwinds and cement losses.

• Operating profit was R555.4m, including a R262.7m bargain-purchase gain; excluding the gain, it fell 45.2% to R292.7m.

• Interim gross dividend was 10.0 cents per share, down from 40.0 cents; NAV per share increased 10.5% to 3,038 cents.

• Lafarge integration is progressing; aggregates, fly ash and ready-mix performed ahead of expectations, while the cement turnaround remains a priority.

Financial highlights

• Revenue was R4,103.4m versus R2,843.7m; gross profit was R780.5m versus R973.4m.

• Profit for the period was R359.7m versus R379.6m; profit attributable to owners was R351.0m versus R379.1m.

• Cash used in operations was R131.4m versus R697.2m generated; working-capital outflows reflected higher iron ore stocks and overdue Lafarge supplier payments.

• Working-capital cash impacts totalled R441.7m, including iron ore stock of R176.7m, debtors of R170.0m and catch-up creditors of R95.0m across Industries and Quarrying.

Outlook and guidance

• Cement losses are targeted to reach break-even within FY2025 through plant optimisation, maintenance, investment and operational efficiency.

• Guidance targets 3m tonnes per annum of added aggregate capacity and 260,000 m³ per annum of added readymix capacity, excluding divestiture-asset volumes; readymix volumes are expected to reach 1.2m from 877,000 in 2023.

• H2 local iron ore volumes are expected to exceed H1; export rail logistics remain challenging, while international iron ore prices stabilised after China’s stimulus announcement.

• Fertiliser sales are ramping toward planned volumes by 2025; Nkomati is expected to export anthracite in H2. Priorities include consistent iron ore performance, Industrial Minerals growth and stronger cash flow.

• Growth prospects include Nkomati open-cast mining, Lafarge construction materials and cement recovery through innovation.