Afrimat warns of interim earnings collapse as iron ore disappoints

AFRIMAT warned shareholders it was set to report a heavy decline in interim headline earnings owing to lower iron ore sales and a weaker average price.The group, valued at about R10bn in Johannesburg, expects headline earnings per share  for the six months ended August to come in between 65.9 South African cents and 39.5c, representing a decrease of 75% to 85% compared with a year ago.Earnings per share (EPS) are expected to be 4% to 14% lower at 243.7c to 218.3c, the group said in a trading statement on Wednesday.The difference between the EPS and HEPS movement is primarily due to the preliminary bargain purchase allocated to the Lafarge acquisition, the company said.First quarter sales volumes and revenue for local iron ore were significantly affected by a major customer’s furnace freeze, reported BusinessLive citing Afrimat’s statement. International iron ore exports were adversely affected by a 5% decrease in dollar prices, a 31% increase in shipping costs and the concurrent strengthening of the rand, the publication said.Additionally, rail shipment volumes via Transnet decreased for the comparative period and are about 20% below the allocated rail capacity.The newly acquired cement business incurred losses for four of the six months after the incorporation of the businesses into Afrimat on May 1, primarily due to known reliability issues at the cement factory, resulting in limited production and stock.Management was prioritising the turnaround of the cement business, which was showing very good progress, Afrimat said.Afrimat, which paid $6m to acquire Lafarge, was confident it can turn the ailing cement company around.The company’s financial results are expected to be released on October 24, said BusinessLive.The post Afrimat warns of interim earnings collapse as iron ore disappoints appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com