Midtier mining firm Afrimat reported a 14.5% lower in headline earnings a share to 252.2c for the six months ended August 31.
The Afrimat board declared an interim gross dividend of 40c a share – on par with the earlier comparable interval.
The corporate stated this was in keeping with a lower in working revenue, from R582.8-million to R512.2-million within the earlier interval, ensuing within the working revenue margin declining from 24.1% to 19.7%.
Nonetheless, group income elevated by 7.2%, from R2.4-billion to R2.6-billion.
Afrimat CEO Andries van Heerden stated strategic initiatives contributed positively to efficiency within the first six months of the monetary yr. These included the profitable commissioning of the Jenkins iron-ore mine, within the Northern Cape; the turnaround of the Nkomati anthracite mine, in Mpumalanga; and continued efforts to enhance operations.
“Diversification, value discount and effectivity enhancements stay the cornerstone of our technique and we used these to counter financial impacts, that are past our management,” he added.
Regardless of utilizing strategic initiatives to offset the impacts, he famous that the corporate’s outcomes had been negatively affected by the downturn in iron-ore costs, an general financial slowdown and the rise in enter prices akin to diesel, explosives and electrical energy.
He stated the stability sheet remained robust, nevertheless, with a web money stability of R772.7-million. Internet money from working actions of R784.1-million was generated, in addition to R680-million from a profitable fairness elevate throughout the interval.
“At current, the group is taken into account debt free because the money stability exceeds the borrowings, with ample capital to execute strategic plans to help Afrimat’s future progress,” Van Heerden stated, including that new enterprise growth remained a key side of the expansion technique.
Van Heerden stated the group’s carbon neutrality technique continued to be carried out, with in depth research having been undertaken to find out the primary detractors.
“An preliminary renewable power challenge to cut back carbon emissions is underway at Glen Douglas Dolomite [in Gauteng],” he stated.
OPERATIONAL REVIEW
Afrimat historically consisted of three working models – development supplies, industrial minerals and bulk commodities. Nonetheless, a brand new working unit – future supplies and metals, consisting of phosphate, vermiculite and uncommon earth components – has expanded Afrimat’s product providing and nationwide footprint.
The majority commodities working unit, consisting of the Demaneng and Jenkins iron-ore mines, and the Nkomati anthracite mine, contributed 76.8% to the group’s working revenue.
Van Heerden stated this robust consequence was largely owing to elevated volumes from Jenkins coming into manufacturing, the profitable turnaround of Nkomati and from startup losses, which turned to profitability from August 2021, in addition to cost-saving initiatives. He added that the Jenkins mine, which was now absolutely operational, along with the Demaneng mine, within the Northern Cape, had produced a rise of 21.9% in iron-ore gross sales quantity throughout the present interval in comparison with the earlier interval.
“Though the working revenue decreased because of the decline within the iron-ore value and an increase in enter prices, a wholesome working revenue margin of 37% was generated from the iron-ore mines,” he stated.
Through the yr, the primary blast was undertaken at Driehoekspan, the iron-ore asset that may substitute Demaneng as soon as it’s mined out of the subsequent 4 years, which is anticipated to be in 4 years’ time. Driehoekspan and Doornpan, each within the Northern Cape, will probably be introduced into manufacturing to take care of export volumes, and have a mixed life-of-mine in extra of 15 years.
Van Heerden stated an progressive expertise answer had been rolled out at Jenkins throughout the mine fleet, which improved effectivity and resulted in important value financial savings, countering the rise in diesel costs and the autumn in iron-ore costs.
“Nkomati, now worthwhile, contributed 25.5% to the section’s income for the interval. It produces a high-quality product bought into the native market as a alternative for imported anthracite, and is recognised as a constant, reliable provider,” he stated.
He added that long-term sustainable manufacturing was being enhanced by opening two opencast pits and the continued growth of the underground operations.
“The primary anthracite is anticipated to be extracted early within the new calendar yr from these developments,” he stated.
Van Heerden famous that the financial slowdown was felt inside Afrimat’s industrial minerals section, leading to a lower in working revenue from R49.6-million to R36.8-million.
Furthermore, the development supplies section skilled the brunt of the slowdown in financial exercise, with Afrimat’s Western Cape companies being impacted probably the most owing to an general discount in development throughout the province. Nonetheless, the KwaZulu-Natal companies confirmed enchancment over the earlier interval, primarily because of an uptick in development.
The working revenue for the development supplies section confirmed a slight lower from R77.8-million to R73.1-million from the earlier comparative interval.
The brand new operational section, future supplies and metals, was added to the group’s operational segments in help of its diversification technique.
“[Phosphate mine] Glenover [in Limpopo] is a brand new challenge and one which diversifies our publicity wider than ferrous metals and aligns to international traits. It brings us a threefold publicity – fertiliser for agricultural functions, vermiculite for industrial and horticultural functions, and uncommon earth components that help technological developments akin to excessive energy everlasting magnets and battery expertise,” he stated.
Van Heerden stated gross sales have been presently being generated from high-grade phosphate, or fertiliser, materials, with testing and design work presently beneath method for vermiculite and single tremendous phosphate crops.
“Stage 2, which incorporates check work for nitrophosphate and uncommon earth processes, is making good progress. After we full this stage, detailed designs will inform the ultimate capital necessities,” he defined, noting that the board had accepted R300-million to purchase Glenover out.
Through the interval beneath assessment, Glenover generated income of R17.8-million with startup losses of R3.9-million.
“The group is within the means of ramping up this operation, with web site institution already accomplished,” Van Heerden stated.
He added that, with respect to Gravenhage, within the Northern Cape, the deal had been terminated, however reiterated that Afrimat nonetheless had entry to manganese by the Driehoekspan mine, the place Afrimat was concentrating on volumes of about 240 000 t/y.
PROSPECTS
Van Heerden stated Afrimat continued to deal with sustainable diversification in all segments.
“Within the new future supplies and metals section, the main target is to ramp up the manufacturing of high-grade phosphate and to execute the subsequent phases of the challenge as seamlessly as attainable,” he stated.
He added that the majority commodities section has carried out an inner effectivity drive with new options expertise, and that these options would now be carried out all through the group to additional enhance efficiencies and margins.
“We’ve got Driehoekspan and Doornpan to deliver on-line as soon as Demaneng volumes start to cut back. This needs to be inside the subsequent 4 years. To optimise manufacturing, Nkomati is within the means of opening up two opencast mine areas, in addition to an underground entry level. Volumes are anticipated to ramp up and the processing plant is effectively maintained and in a position to tackle further manufacturing,” Van Heerden stated.
“Operational effectivity initiatives aimed toward increasing volumes, lowering prices and creating the required talent ranges throughout all staff, stay a key focus in all operations,” he added.
