Afrimat shares up 5.1% after big earnings forecast
CAPE TOWN – Afrimat's share price rose 5.1 percent to R31.41 after it said headline earnings per share were expected to rise up to 100 percent in the six months to August 31.
Earnings per share were expected to be between 168.5 cents and 187.2c per share, versus 93.6c in 2018, reflecting an increase of between 80 and 100 percent on the previous period, it said in a trading statement.
Headline earnings per share were expected to be between 167.6c and 186.2c per share, versus 93.1c in 2018, reflecting an increase of between 80 and 100 percent on the previous period, a statement said on Wednesday.
“Afrimat is pleased with improved results from the Construction Materials segment, the strong growth of the Industrial Minerals businesses and the healthy contribution from the Demaneng iron ore mine,” it said. Afrimat acquired the previously loss-making Demaneng mine in Northern Cape in 2016 and turned it round.
Iron ore prices, fuelled by a global supply deficit, rose sharply this year and topped $120 (R1766.70) per ton in July for the first time since 2014, but fell sharply again in August. On Wednesday it traded 4.6 percent lower at R89.84 per ton.
Afrimat chief executive Andries van Heerden said yesterday that their most recent diversification into iron ore had helped support the group's growth.
“Afrimat’s entrepreneurial approach, diversified product range, strategic positioning and good service delivery, would enable it to continue to navigate tough conditions in the construction sector,” he said.
In the year to February 28, 2019, Afrimat lifted headline earnings per share 29.5 percent to 234.1c, helped by its diversified income streams. Earlier this year the group opted not to pursue a potential Australian coal mining acquisition, following a due diligence.