Afrimat expects earnings to rise as much as a quarter
CEO Andries van Heerden says it is the perfect time for the mining and materials company to return to its roots
Mid-tier mining and materials company Afrimat expects earnings for the year ended February to rise by as much as 25%.
The company, which recently received the green light from the regulatory authorities to acquire 100% of Lafarge SA and its subsidiaries, expected headline earnings per share (HEPS) of 553.6c-576.5c, 21%-26% higher than the previous year, it said in a statement on Tuesday.
Earnings per share (EPS) are expected to be 11%-16% higher.
The Lafarge SA deal gives Afrimat access to some of the best assets in the SA construction industry.
Afrimat received approval from the Competition Tribunal earlier in April to acquire what is collectively known as the LSA Group, which is owned by a subsidiary of Swiss-French multinational building materials manufacturer Holcim Group.
CEO Andries van Heerden said it was the perfect time for Afrimat to return to its roots of quarrying and aggregates to support long-term diversified sustainability across the group.
CFO Pieter de Wit has been appointed as the full-time integration manager to ensure integration is as uncomplicated as possible.
Lafarge fitted perfectly into Afrimat’s construction materials business, which had a similar operating model with quarries around the country, some crushing and beneficiation, the CEO said. Lafarge has 11 operating quarries plus another six or seven that are dormant, and a big limestone mine that supplies the cement factory in Lichtenburg.
The acquisition was structured as a locked box transaction, effective December 31 2022.
In addition to the purchase consideration payable of $6m, Afrimat agreed to repay the LSA Group’s debt to the Holcim Group amounting to R900m. The first tranche of R500m will be paid on the closing and the outstanding R400m over the next year after that.