Afrimat profits drop by 45% as it digests the latest acquisition of Lafarge

Diversified mining group Afrimat reported a 45% drop in operating profit to R292,7m in the six months to end-August (previous comparable period – R534.1m) despite a 44% jump in group revenue to R4.1bn (R2.8bn).Reasons were losses incurred from the recently acquired Lafarge cement business – which Afrimat bought for $6m plus the repayment of a R900m loan – and a sharp drop in iron ore sales to a South African customer which was hit by “a freeze of two furnaces”.The group reported cash used in operations of R131.4m for the six months (previously R697m cash generated) and cut its interim dividend to 10c a share (40c a share)Reasons cited for the cash outflow were increasing working capital requirements because of higher iron ore stock levels as well as “addressing overdue payments to suppliers in the Lafarge business.”Afrimat operates in mining, quarrying and related industries and has established a track record for acquiring “distressed assets and turning these around to contribute profitably”.CEO Andries van Heerden commented, “the turnaround of the ex-Lafarge business is managed according to strict project management principles and a speedy return to profitability is expected.’He added, “the integration of the Lafarge acquisition is progressing according to plan with a solid performance from the aggregate quarries and ash business leading to an overall improvement in the results of the construction materials segment.”Van Heerden said, “as expected, the net debt/equity position increased to 45.6% (February 2024: 1.4%) due to funding towards the Lafarge and Glenover transactions. The group remains committed to ensure strong cash generation to settle the additional debt as quickly as possible.”He commented, “Afrimat is known for being acquisitive in nature. The most recent Lafarge acquisition is in the process of being successfully integrated into the group.“Prospects for Nkomati anthracite; an expanded construction materials business through LaFarge; a recovery in cement through innovation and other growth initiatives will better balance Afrimat’s diversity, placing the group on a sustainable pathway forward.”The post Afrimat profits drop by 45% as it digests the latest acquisition of Lafarge appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.comWeiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com