Our opinion on the current state of AFRIMAT(AFT)
Afrimat (AFT) is an open-pit mining company supplying composites, construction materials, and other commodities to various industries across Southern Africa. Historically, Afrimat was one of the top-performing shares on the JSE until the end of 2015. After a period of consolidation and navigating through the COVID-19 crisis, the stock broke out of a 3-year sideways pattern, peaking at R76 on 6th April 2022. However, it has since declined due to the downturn in the commodity cycle.
The acquisition of the Demaneng iron mine in the Northern Cape has helped buffer Afrimat from challenges in the construction industry. Afrimat has been actively pursuing diversification into other base minerals such as manganese, chrome, and coal. The company's CEO, Andries van Heerden, has stated that Afrimat is known for its successful acquisitions and is constantly evaluating new opportunities.
Some of Afrimat's significant acquisitions and developments include:
- On 26th May 2020, Afrimat expressed interest in Unicorn Capital Partners, which operates an anthracite mine.
- On 17th August 2020, Afrimat purchased Coza Mining, involved in iron and manganese exploration, for R300 million.
- On 21st May 2021, Afrimat acquired the Gravenhage manganese mine in the Kalahari Manganese Field for $45 million.
- On 10th December 2021, Afrimat announced the acquisition of Glenover Phosphate for R550 million.
- On 20th March 2022, Afrimat's listing was moved to the General Mining sector, reflecting its diversified business.
- On 20th June 2023, Afrimat acquired Lafarge, a construction materials company, for $6 million.
In its latest financial results for the six months ending 31st August 2024, Afrimat reported:
- Revenue up 44.3%.
- Headline earnings per share (HEPS) down to 53c, from 263.4c in the previous period.
- Net asset value (NAV) increased by 10.5% to 3038c per share.
Afrimat highlighted several challenges during this period, including a declining iron ore price, a strengthening Rand, export limitations on rail lines, and losses in its cement business. The company also dealt with reduced offtake from large industrial customers. Despite these challenges, Afrimat’s low debt levels and diversified portfolio across multiple commodities help mitigate some of the risks posed by fluctuating commodity prices.
The company received approval from the Competition Commission on 10th April 2024 for its full acquisition of Lafarge.
With a price-to-earnings (P:E) ratio of 11.63, Afrimat appears reasonably priced. Although the company has faced setbacks due to commodity price drops, its diversification and low debt levels make it a compelling value opportunity. Technically, the share is in a volatile upward trend, and there is confidence that the trend will continue in the near term, supported by the company’s strong fundamentals and acquisition-driven strategy.
The acquisition of the Demaneng iron mine in the Northern Cape has helped buffer Afrimat from challenges in the construction industry. Afrimat has been actively pursuing diversification into other base minerals such as manganese, chrome, and coal. The company's CEO, Andries van Heerden, has stated that Afrimat is known for its successful acquisitions and is constantly evaluating new opportunities.
Some of Afrimat's significant acquisitions and developments include:
- On 26th May 2020, Afrimat expressed interest in Unicorn Capital Partners, which operates an anthracite mine.
- On 17th August 2020, Afrimat purchased Coza Mining, involved in iron and manganese exploration, for R300 million.
- On 21st May 2021, Afrimat acquired the Gravenhage manganese mine in the Kalahari Manganese Field for $45 million.
- On 10th December 2021, Afrimat announced the acquisition of Glenover Phosphate for R550 million.
- On 20th March 2022, Afrimat's listing was moved to the General Mining sector, reflecting its diversified business.
- On 20th June 2023, Afrimat acquired Lafarge, a construction materials company, for $6 million.
In its latest financial results for the six months ending 31st August 2024, Afrimat reported:
- Revenue up 44.3%.
- Headline earnings per share (HEPS) down to 53c, from 263.4c in the previous period.
- Net asset value (NAV) increased by 10.5% to 3038c per share.
Afrimat highlighted several challenges during this period, including a declining iron ore price, a strengthening Rand, export limitations on rail lines, and losses in its cement business. The company also dealt with reduced offtake from large industrial customers. Despite these challenges, Afrimat’s low debt levels and diversified portfolio across multiple commodities help mitigate some of the risks posed by fluctuating commodity prices.
The company received approval from the Competition Commission on 10th April 2024 for its full acquisition of Lafarge.
With a price-to-earnings (P:E) ratio of 11.63, Afrimat appears reasonably priced. Although the company has faced setbacks due to commodity price drops, its diversification and low debt levels make it a compelling value opportunity. Technically, the share is in a volatile upward trend, and there is confidence that the trend will continue in the near term, supported by the company’s strong fundamentals and acquisition-driven strategy.
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