Wrap Text
Unaudited condensed consolidated interim financial results for the six months ended 31 August 2026
AFRIMAT LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2006/022534/06)
Share code: AFT
ISIN: ZAE000086302
(“Afrimat” or “the Company” or “the Group”)
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2026
1. SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the directors and is only a summary of the
information in the unaudited condensed consolidated interim financial results for the six months
ended 31 August 2026 (“interim results”) and does not contain full or complete details. The interim
results are available on the JSE cloudlink at:
https://senspdf.jse.co.za/documents/2026/jse/isse/AFT/FY27H1.pdf and are also available on the
Company’s website at https://www.afrimat.co.za/investor-relations/financials/#78-99-wpfd-interim-
results.
Any investment decision should be based on the consideration of the interim results published on
the Company’s website and on the JSE cloudlink, as a whole, as the information in this short-form
announcement does not contain full or complete details.
The interim results have been prepared under the supervision of the Chief Financial Officer, PGS
de Wit CA(SA).
Neither this short-form announcement nor the interim results, of which this announcement is a
summary, have been audited or reviewed by the Company’s auditors, PricewaterhouseCoopers
Inc.
2. INTRODUCTION
The Group’s performance remained under pressure in the first half of the 2027 financial year. Since
listing in 2006, Afrimat has never faced trading conditions as challenging as those experienced
during the six months ended 31 August 2026 (“the period”). This is reflected in a significantly
weaker financial performance. The period was characterised by a significant decline in the
profitability of the Iron Ore business and continued operational challenges in Cement, in contrast to
an excellent performance from the Aggregates business.
Management remained focused on optimising the portfolio and protecting the balance sheet. Loss-
making operations were closed, disposed of or restructured. The divestiture of the operations
required by the Competition Commission as a condition of the Lafarge acquisition (“divested
operations”) was completed on 1 June 2026. The resulting portfolio is more focused, and the
benefits are visible in the improved underlying margins of the Aggregates business.
While earnings declined, cash generated from operations improved, supported by successful
working capital initiatives. Net debt reduced and the net debt:equity ratio improved, reflecting
management’s continued attention to cash preservation during this period of operational pressure.
3. FINANCIAL RESULTS
Unaudited six Unaudited six Change %
months months ended
ended 31 31 August
August 2026 2025
R’000 R’000
Revenue 5 099 323 5 330 059 (4,3)
Operating profit 255 174 379 828 (32,8)
Earnings per share (cents) 2,6 102,7 (97,4)
Headline earnings/(loss) per share (cents) (58,0) 101,9 (156,9)
Interim dividend per share (cents) – 20,0 (100,0)
Group revenue decreased by 4,3% to R5,1 billion (August 2025: R5,3 billion), mainly due to lower
revenue in the Iron Ore and Cement businesses, which was partly offset by growth in Aggregates
and higher anthracite export volumes.
Operating profit decreased by 32,8% to R255,2 million (August 2025: R379,8 million), at an
operating profit margin of 5,0% (August 2025: 7,1%). Operating profit includes a once-off profit of
R95,5 million on the disposal of the divested operations.
The decline was driven primarily by the Bulk Commodities segment, where operating profit
decreased from R445,1 million to R8,6 million, and by the wider operating loss in the Cement
business. These headwinds were partially offset by the strong performance of Aggregates and a
30,6% reduction in centralised shared services costs to R194,0 million (August 2025: R279,5
million), largely attributable to the elimination of legacy information system costs.
Finance costs increased by 11,8% to R166,0 million (August 2025: R148,4 million). Profit before
tax decreased by 48,2% to R137,7 million (August 2025: R266,0 million). The effective tax rate
increased since no deferred tax asset was recognised in respect of the tax losses incurred in the
Cement business.
Profit after tax decreased by 87,0% to R22,6 million (August 2025: R173,5 million). Earnings per
share decreased by 97,4% to 2,6 cents per share (August 2025: 102,7 cents per share) and the
Group reported a headline loss per share of 58,0 cents per share (August 2025: headline earnings
per share of 101,9 cents per share), a decrease of 156,9%. The larger decline in headline earnings
reflects the exclusion of the profit on the disposal of businesses, including divested operations, as
well as the disposal of non-core assets.
Cash generated from operations increased by 21,1% to R433,1 million (August 2025: R357,7
million). The improvement was primarily driven by disciplined working capital management. The
Group incurred capital expenditure of R247,6 million during the period.
Proceeds of R158,0 million from the disposal of businesses supported the repayment of borrowings.
Net debt decreased to R2,1 billion (February 2026: R2,2 billion) and the net debt:equity ratio
improved to 46,0% (February 2026: 50,2%). All bank covenants remain within the limits set by the
lenders. Net asset value per share was 2 899 cents (August 2025: 2 951 cents).
4. OPERATIONAL REVIEW
The Group’s operating units are positioned to deliver outstanding service to customers, and the
diversified portfolio provides a degree of resilience against volatile local business conditions. The
product range is wide and diversified and is made up of Construction Materials consisting of
aggregates, concrete-based products, fly-ash and cement; Industrial Minerals consisting of
limestone, dolomite and industrial sand; and Bulk Commodities consisting of iron ore, anthracite
and manganese. The Services segment consists of external logistical and mining services, while
the Future Materials and Metals segment is made up of phosphate and rare earth elements.
Construction Materials
Revenue increased by 0,2% to R2,8 billion and operating profit more than doubled to R421,7 million
(August 2025: R194,1 million).
The Aggregates and Fly-ash components delivered an excellent first-half performance. Revenue
increased by 5,3% to R2,0 billion (August 2025: R1,9 billion) and operating profit increased by
76,8% to R567,8 million (August 2025: R321,2 million), at an operating profit margin of 27,8%
(August 2025: 16,6%).
The improvement was driven by improved operational efficiencies and cost discipline at the ex-
Lafarge quarries, a deliberate focus on higher-margin products, the completion of capital projects
that improved plant capacity and efficiency, and increased ballast and boulder sales, including
emergency flood repair work in the Western Cape. The closure, disposal and restructuring of loss-
making operations contributed further to the improvement. These results were achieved despite
rising fuel prices that led customers to postpone projects and prolonged wet weather in the Eastern
Cape.
The Cement business remained loss-making, with an operating loss of R146,1 million (August
2025: R127,1 million). Revenue decreased by 11,1% to R776,3 million, as sales volumes declined
by 9,0%. Clinker production for the period increased by 12,0%.
Bulk Commodities
The Bulk Commodities segment came under significant pressure during the period. Revenue
decreased by 3,3% to R1,8 billion and operating profit decreased to R8,6 million (August 2025:
R445,1 million).
The iron ore and manganese mines’ revenue decreased by 7,9% to R1,2 billion (August 2025: R1,3
billion) as increased export iron ore and manganese volumes largely offset lower domestic volumes.
Operating profit decreased to R11,3 million (August 2025: R403,5 million), primarily due to lower
domestic sales volumes, weaker realised export prices, higher mining costs and the lower margin
nature of manganese sales. Iron ore export revenue was adversely impacted by a stronger Rand
and significantly higher shipping costs (49,1%) due to disruptions resulting from the Iran conflict.
As a result, average mine-gate revenue per tonne was down by 16,4%.
Nkomati Anthracite Mine’s revenue increased by 9,2% to R543,0 million (August 2025: R497,2
million), supported by significantly higher export volumes. It reported an operating loss of R2,7
million (August 2025: operating profit of R41,6 million), impacted largely by the closure of
ferrochrome smelters, which are slowly starting up again. Production was managed in line with
demand. Plant throughput has returned to previous levels, which leaves the operation well placed
to increase production once additional smelters open. Total sales volumes increased by 18,2% to
234 051 tonnes.
Iron ore – domestic
Domestic sales volumes decreased by 36,5% to 527 696 tonnes (August 2025: 830 662 tonnes),
adversely affected in Q1 as a domestic customer drew on non-Afrimat stockpiles it had secured
previously, leading to lower and irregular sales volumes. Domestic iron ore volume trends began to
recover in Q2.
Iron ore – international
Export volumes increased by 29,9% to 514 809 tonnes (August 2025: 396 384 tonnes), including
110 140 tonnes exported through an allocation on the General Freight Business (“GFB”) rail line in
July and August. Although the increased volumes supported revenue generation and enabled the
monetisation of excess inventory, profitability was materially lower due to weaker realised export
prices, rising mining and processing costs as Demaneng approaches end of life, and the low margin
nature of the GFB export tonnes. Doornfontein, a newly acquired lower-cost deposit, will replace
Demaneng.
Manganese
Afrimat secured a seven-year MECA III allocation of 240 000 tonnes per annum via the Coega
Manganese Export Terminal near Gqeberha. The first vessel under this allocation departed on 4
August 2026, carrying 59 635 tonnes. Including these tonnes, total manganese volumes increased
to 240 433 tonnes (August 2025: 76 337 tonnes). Afrimat expects to fill one vessel per quarter for
the remainder of the financial year.
Anthracite – domestic
In August 2025, structural economic impediments in the local economy led to the temporary
shutdown of all ferrochrome smelters. The smelters and the National Energy Regulator of South
Africa reached agreements in April 2026 with the approval of a reduced electricity tariff for smelters.
Some ferrochrome smelters have reopened, and others are ramping up. As a result of the
shutdown, domestic sales lagged previous levels, with volumes amounting to 83 118 tonnes
(August 2025: 136 216 tonnes).
Anthracite – international
Export volumes increased to 150 933 tonnes (August 2025: 61 862 tonnes), due to additional ports
and shipments being secured, although subdued export prices resulted in marginal contributions.
Industrial Minerals
Revenue reduced by 20,0% to R216,4 million (August 2025: R270,6 million) and operating profit
decreased by 5,2% to R21,3 million (August 2025: R22,5 million). The operating profit margin
improved to 9,8% (August 2025: 8,3%).
Performance improved in the second quarter after a challenging first quarter. Demand from
customers in the steel, ferrochrome and chemical sectors remained below traditional levels, and
continued pressure from imported products reduced volumes. This was partly offset by a strong
recovery, supported by construction aggregate and road-building material sales, and by a good
agricultural lime season. The focus on equipment reliability, cost control and energy efficiency
continues to contribute positively to earnings.
Future Materials and Metals
Revenue increased by 12,9% to R60,6 million (August 2025: R53,7 million), with an operating loss
of R19,7 million (August 2025: R24,8 million). Production at Glenover was stopped during the
second quarter due to an extremely high price of sulphuric acid.
The Glenover resource comprises both a rare earth stream and an iron phosphate stream. Rare
earth has been successfully recovered from a rare earth-rich slag, and the iron phosphate stream
produces an Fe-P alloy, a feed source with potential to produce battery precursor material.
On the technical front, development work continues to advance, with positive results achieved
across key stages of the process, including efficiency improvements. Commercially, momentum
continues to build among prospective partners, with strategic parties actively contributing to
validation efforts and ongoing engagement scheduled in the months ahead.
5. BUSINESS DEVELOPMENT
The Group’s business development team remains a key component of the strategy. The team
continues to identify opportunities in existing markets, as well as in anticipated new high-growth
areas in southern Africa.
6. DIVIDEND
No interim dividend was declared for the six months ended 31 August 2026.
7. PROSPECTS
The Aggregates business is expected to maintain its improved performance, supported by a more
focused portfolio, the benefits of completed capital projects and continued demand from rail
maintenance and infrastructure work. Rising fuel costs as a result of the Iran conflict and delays in
public-sector project payments remain risks to demand and profitability.
With Kiln 3 back in operation from 1 September 2026, the Cement business is expected to benefit
from improved clinker availability. Management remains focused on plant reliability and throughput,
and demand for low-carbon, high-quality cement remains strong. The investigation into strategic
alternatives continues and the market will be updated as soon as possible.
Iron ore export volumes recovered well towards the end of the period, but realised prices remain
under pressure from high shipping costs and a stronger Rand. The Doornfontein resource will
replace the mined-out Demaneng mine. Initially mined as a Direct Shipping Ore, this will keep
overall mine costs lower than they currently are at Demaneng and provide a strong moat around
this part of the business. The first iron ore from Doornfontein is expected in the last quarter of
F2027. Domestic iron ore demand is expected to stabilise in the region of 90 000 to 100 000 tonnes
per month.
Nkomati’s lower cost base leaves it well placed if volumes improve as more smelters come online,
supported by the Group’s export strategy. The Industrial Minerals segment will benefit from the
reopening of the ferrochrome smelters, as well as import protection, which the Government seems
to be moving towards.
Against a global backdrop of tight supply and growing demand for secure, diversified sources of
critical minerals, the strategic case for the Glenover project remains positive. Updates will be shared
with the market as work progresses.
Despite the difficult trading environment, management is confident the Group’s diversified
foundation is sound. Afrimat will continue to prioritise cash generation, debt reduction and
operational reliability, positioning it to deliver improved returns as conditions recover.
This announcement may contain forward-looking statements that have not been reviewed or
reported on by the Company’s auditor.
Cape Town
22 October 2026
Sponsor
Valeo Capital (Pty) Ltd
Date: 22/10/2026 07:05:00
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