Wrap Text
Afrimat business update and pre-close briefing session
AFRIMAT LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2006/022534/06)
Share code: AFT
ISIN: ZAE000086302
("Afrimat" or "the Company")
AFRIMAT BUSINESS UPDATE AND PRE-CLOSE BRIEFING SESSION
Afrimat is a successful multi-commodity, mid-tier mining company that produces and supplies
construction materials, cement, iron ore, anthracite, phosphate and high-quality industrial minerals.
Operational execution remained the focus during the second half of the financial year to ensure that
Afrimat unlocks the full potential of its diversified asset base. The teams delivered meaningful
progress, demonstrating their ability to excel even in a constrained local economic landscape. Notable
accomplishments during the year include:
• Good performance in the aggregates business;
• The successful sale of non-core brick and block and readymix plants;
• Financial approval from the preferred bidder's financiers has been obtained to acquire
Afrimat's assets identified for the divestiture as mandated by the Competition Commission;
• Losses in cement have moderated;
• Local iron ore sales volumes were maintained in the second half; and
• International iron ore sales were satisfactory.
The Construction Materials and Bulk Commodities segments will be the most meaningful contributors
to revenue and profitability. The debt-to-equity ratio remains at the same levels as previously
reported. The sale of various non-core assets and businesses should generate cash to begin reducing
debt in the new financial year. Debt is being refinanced using a longer-term facility to more accurately
reflect the nature of the debt.
Construction Materials
Aggregates
Significant progress was made in the second half of the financial year, with 80% of the projects
required to place the aggregates business in a stronger and more competitive position completed.
This included maintenance, repairs and operational improvements. The emphasis has now moved to
addressing those quarries delivering suboptimal margins, with initiatives underway to bring their
performance in line with the overall aggregates margin. The FY2026 margin for Construction Materials
is expected to improve slightly. However, lower margins from the recently sold non-core businesses
will impact the Company and its subsidiaries' ("the Group") overall margin.
Year-on-year revenue growth is driven by a wider presence across the country and continued orders
from road builders, construction, ballast and some provincial infrastructure maintenance.
Non-core brick and block and readymix businesses were sold, as well as non-core properties. To
improve efficiency in some of the larger quarries, rental plant was replaced with Afrimat mobile plant
and machinery. In some instances, cash proceeds from non-core asset sales are expected only after
the FY2026 year-end due to Section 11 approvals required under the Mineral and Petroleum Resources Development Act.
Cement and extenders
Clinker production for the year is expected to be 20% higher than last year. Overall Equipment
Efficiency ("OEE") is improving with some work still to do and further gains expected.
To prevent a recurrence of disruptions caused by wet limestone, which led to kiln instability in 2025,
limestone domes at the Lichtenburg plant have been successfully filled before the start of the rain
season. The Tswana Lime Mine operations are in good condition and should deliver significant
additional cost savings.
The Randfontein Grinding Plant operated at an acceptable, consistent level throughout the year and
has been a key enabler of stable Buildcrete and Durabuild production.
Cement sales volumes are expected to show a good year-on-year increase, but the segment remains
loss-making, although losses narrowed in the second half of the year.
Capital expenditure for cement should settle at around R120 million, showing good progress with
equipment upgrades to ensure higher OEEs going forward.
Bulk Commodities
The Bulk Commodities segment has been affected by several structural factors in the South African
economy.
Iron ore – domestic
An improvement in volumes sold is expected compared to the previous year, given an increase in
offtake from ArcelorMittal ("AMSA") (FY2025 volumes: 889 556 tons). The Group's local iron ore sales
are to AMSA's Vanderbijlpark Flats business.
Afrimat remains in ongoing discussions with AMSA and eagerly awaits the outcome of its discussions
with the Industrial Development Corporation and the Department of Trade, Industry and Competition
("DTIC"). Not only is this outcome fundamental to Afrimat, but it is critical for South Africa. Beyond
safeguarding thousands of jobs, it also sustains South Africa's industrialisation rather than allowing
another vital industry to collapse.
Iron ore – international
Sales were satisfactory and are expected to be on par with those of the previous year (FY2025
volumes: 726 436 tons). Sales volumes were constrained due to actual shipment capacity being 16%
down on the committed rail allocation of 870 000 tons per annum. International iron ore pricing is
expected to average US$101 per ton (FY2025: US$105).
Anthracite – domestic
During the first half of the financial year, significant operational improvements were achieved at the
Nkomati Anthracite Mine. Due to the shutdown of the ferrochrome smelters in South Africa in August
2025, it was expected that volumes would decrease in the second half of the year, which was the case.
During November and December 2025, and January 2026, the mine was in full shutdown, starting up
again in February 2026 with a skeleton staff in place, in anticipation of at least two ferrochrome
smelters reopening. A restart date for the smelters has not been confirmed. Overall, local volume sales
are expected to settle at roughly half of the volumes reached in FY2025 (277 151 tons).
Anthracite – international
Anthracite from stockpiles was sold in the international market. These export volumes increased
substantially from FY2025 (74 244 tons).
This increase was insufficient to offset the loss in local volumes. Total anthracite volumes for FY2026
will be approximately 3% less than FY2025.
Glenover
Rare earth processing is highly complex and strategically important. Afrimat's technical team has
performed extensive testing both locally and internationally, assessing different processing methods
to achieve the best recovery. Afrimat has chosen project strength over speed and has invested the
time needed to position a globally competitive project. Discussions have begun with reputable
international players to partner with Afrimat on this project, both technically and financially.
Industrial Minerals
This segment, a very small contributor to the Group, was also affected by the shutdown of various
smelters in South Africa.
Prospects
Afrimat acquired Lafarge to enhance its access to quarries and aggregates, and this strategic move is
beginning to show excellent results. With numerous management interventions to improve the
business, as well as increased orders, the coming financial year is expected to provide a clearer picture
of expectations, with Afrimat having returned to its original quarrying roots.
The Group views the stagnant cement market as an opportunity to gain market share. With above-CPI
price increases negotiated and confirmed, the 2027 financial year should deliver revenue sufficient to
cover cost increases, excluding potential volume growth.
Afrimat continues to drive international anthracite sales, although a shipment scheduled for loading
in February has been delayed to later in the year. A strong marketing effort continues.
The Group's operational results should change substantially once the ferrochrome smelters reopen.
This will be further supported by the reallocation of the international iron ore line scheduled to take
place in 2027, enabled through excellent engagement with Transnet.
This year marks Afrimat's 20th anniversary, and in recent years, it has had to contend with treacherous
local conditions. A huge amount of time has been invested in each segment to ensure it is positioned
to navigate the new realities of South Africa.
Trading conditions are expected to remain difficult until fair trade protections across critical industries
in South Africa are adequately addressed. Afrimat is feeling the impact of pedestrian economic growth
and customers who are contending with cheap imports. It is time for our political leadership to make
sound economic decisions, collaborate more actively with the private sector, and demonstrate
performance and tangible outcomes supported by strong economic objectives.
To counter this, Afrimat is assessing projects where international or local partners and technology can
help advance timelines and unlock value for shareholders.
Pre-close briefing session
Afrimat shareholders are advised that the Company will host a pre-close briefing session relating to
its business activities for the year ended 28 February 2026 via a virtual discussion from 11:00 to 12:00
on Thursday, 19 February 2026.
Shareholders interested in attending the briefing session should contact Keyter Rech Investor
Solutions at antoinette@kris.co.za for the link.
A recording of the session can be requested by contacting Keyter Rech Investor Solutions at the
abovementioned email address.
Further update
Afrimat will update the market in April 2026 once management has greater certainty about the
Company's financial position.
This announcement contains forward-looking statements based on Afrimat's current beliefs and
expectations of future events. The financial information contained in this announcement has not been
reviewed and reported on by the Group's external auditors.
Cape Town
17 February 2026
Sponsor
Valeo Capital (Pty) Ltd
4
Date: 17-02-2026 07:05:00
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