Afrimat (AFT) H1 2027 earnings summary

Executive summary

• H1 FY2027 was described as the most challenging half since listing; weaker Iron Ore and Cement results were partly offset by strong Aggregates and Fly Ash performance.

• Revenue declined 4.3% to R5.099bn, while operating profit fell 32.8% to R255.2m and operating margin narrowed to 5.0% from 7.1%.

• Portfolio optimisation, working-capital discipline and cost controls supported stronger operating cash generation and lower net debt.

Financial highlights

• Profit after tax fell 87.0% to R22.6m; EPS was 2.6 cents versus 102.7 cents, while HEPS was -58.0 cents versus 101.9 cents.

• Cash generated from operations rose 21.1% to R433.1m; capital expenditure was R247.6m.

• Reported operating profit included a R95.5m gain on disposal of divested operations; disposal gains were excluded from headline earnings.

• Asset disposals generated R158.0m in cash proceeds, including Competition Commission-mandated divestitures.

• No interim dividend was declared, compared with 20.0 cents per share in the prior-year interim period.

Outlook and guidance

• Domestic iron ore demand is expected to stabilise at 90,000–100,000 tonnes per month; first Doornfontein sales are expected in Q4 FY2027.

• Aggregates is expected to sustain improved performance, supported by rail maintenance and infrastructure demand; fuel costs and delayed public-sector payments remain risks.

• Cement outlook benefits from Kiln 3 returning to operation on 1 September 2026 and improved clinker availability; strategic alternatives remain under review.

• Management prioritises cash generation, debt reduction and operational reliability, targeting improved returns as conditions recover.