Afrimat has had its hardest six months since it listed on the JSE in 2006, and most of the damage came from iron ore. Selling ore overseas exposes a miner to two things it cannot set: the exchange rate when the money comes home, and the cost of getting the ore onto a ship. Between March and August, both went the wrong way.
The stronger rand cut what its export sales were worth, and shipping cost 49.1% more, which Afrimat blames on disruption from the Iran conflict. Together they pulled down what it earned on each ton at the mine gate, before transport, by about a sixth.
Local buyers did not make up for it. One domestic customer spent the first quarter using up stockpiles it had bought elsewhere, and although sales recovered in the second quarter, local iron ore volumes still finished 36.5% down on a year earlier.
A loss and a profit in one statement
That is how Afrimat ends up with two very different numbers in Wednesday's trading statement, which the auditors have not reviewed and which comes ahead of full interim results on or about 22 October. It expects a headline loss of between 55 and 60 cents a share, where the same half last year brought headline earnings of 101.9 cents. Its ordinary earnings per share, meanwhile, should stay a whisker above zero.
The difference is what Afrimat sold. Headline earnings leave out one-off profits from selling parts of the business, and Afrimat had several this half: the disposals the Competition Commission required of it, and its brick and block businesses. Those sales brought in cash too, which helped push debt below half of what shareholders own in the company.
The quarries that kept growing
Away from iron ore, most of the business held up. Its quarries, including the ones it bought from Lafarge, kept growing, and their operating margin widened again this half despite dearer fuel. Over the four years to FY2026, operating profit there grew by more than a third a year on average. Cement is the weak spot: after heavy spending on engineers, managers and lasting repairs, it was still losing money early in the period.
Afrimat is also adding things to dig. It has a new manganese allocation of 240,000 tons a year for seven years, with the first shipload already gone, and the Doornfontein iron ore deposit will replace Demaneng.
