Afrimat keeps dividend unchanged as offsets tough market conditions with “strategic initiatives”

Andries van Heerden, CEO, Afrimat

AFRIMAT kept the interim dividend unchanged at 40 cents a share despite posting a 13.6% decline in share earnings of 252.4 cents.

The diversified midcap miner said the results were affected by a downturn in iron ore prices, the economic slowdown, and the rise in input costs such as diesel, explosives and electricity “although this was mostly offset by the results of strategic initiatives”.

Strategic initiatives included the successful commissioning of the group’s Jenkins iron ore mine, the turnaround of the Nkomati anthracite mine, and the continuous improvement of existing operations.

Afrimat had net cash of R772.7m as of August 30.

“Diversification, cost reduction and efficiency improvements remain the cornerstone of our strategy and we used these to counter economic impacts, which are beyond our control,” said Andries van Heerden, CEO of Afrimat in the group’s interim results.

Afrimat said earlier this month that it would press ahead with a R550m deal to buy phosphate, vermiculite and rare earth mining rights from Glenover Phosphate on a deposit situated near Thabazimbi in Limpopo Province.

However, it bailed from the proposed $45m purchase of Gravenhage, a manganese deposit in the Northern Cape. Commenting in August, Afrimat said it would not proceed principally because the venture lacked a compliant water use licence.

Commenting on its prospects, Afrimat said it was “well positioned to capitalise on strategic initiatives and future opportunities”, adding that: “Many exciting opportunities are being investigated”. Shares in the company are about 21% weaker year-to-date in a context of global economic shrinkage and a correction in certain commodity prices.