Mining and materials group Afrimat’s latest annual results have shown a business growing at the top line but under pressure at the margin level as it invests heavily to fix its cement operations.
For the year ended February 2026, revenue increased 20.3% to R10-billion, while operating profit rose by a modest 9.6% to R523.7-million.
The results have shown an extensive cost of repairing and stabilizing the cement business acquired from Lafarge, as well as spending on maintenance to restore plant performance.
Despite generating R1.5-billion in revenue and achieving strong growth in production and sales volumes, the business recorded an operating loss of R185-million.
“The increase in the cost of sales is primarily due to higher-than-normal repairs and maintenance in the cement business to improve the performance of the plant,” reads the statement.
Outside of cement, Afrimat’s diversified portfolio helped cushion performance as the iron ore segment delivered strong growth, with operating profit increasing by 35.3% to R605.1-million, supported by higher local sales volumes.
In the second half of the year, lower demand and pricing pressures exposed volatility in the iron ore business.
Steps taken to improve financial position
Additionally, a domestic customer temporarily reduced volumes, which tied up cash and caused a stock build-up.
“Cash flow from operating activities is beginning to recover, but a stock build-up in the iron ore business due to a domestic customer unexpectedly taking less volume temporarily tied up cash. Afrimat has, however, implemented initiatives to convert these stockpiles into cash,” reads the statement.
The anthracite business also came under strain following the shutdown of ferrochrome smelters in South Africa, resulting in Nkomati’s swing from R57.3-million profit in the previous year to R118.2-million loss due to no sales for six months and highlighting the group’s exposure to disruptions in downstream industries.
Cash generation improved to R831.4-million, but it remains below the group’s typical levels. Management expects this to strengthen as operational improvements take hold and proceeds from non-core asset sales are realised.
Afrimat has also taken steps to improve its financial position by restructuring R1-billion of debt into a five-year loan, with a focus on reducing debt in the coming year.
Looking ahead, the group is positioning itself for future growth through its exposure to critical minerals.
Its Glenover project, which contains phosphate and rare earth elements, is being developed with a focus on securing the right technical and financial partners.
- Afrimat's revenue grew 20.3% to R10 billion for the year ended February 2026, with operating profit rising 9.6% to R523.7 million despite margin pressures.
- High repair and maintenance costs to stabilize the acquired Lafarge cement operations led to an R185 million operating loss in the cement segment despite strong sales and production.
- The iron ore segment saw a 35.3% increase in operating profit (to R605.1 million) supported by higher local sales, though demand and pricing volatility impacted the second half.
- Cash flow recovery was hampered by stock build-up due to a domestic customer cutting volumes, while the anthracite business suffered a R118.2 million loss due to ferrochrome smelter shutdowns, exposing industrial risks.
- Afrimat improved cash generation to R831.4 million, restructured R1 billion of debt into a five-year loan, and is focusing on future growth through critical minerals projects like Glenover phosphate and rare earth elements development.
