The Afrimat quarry in Greenbushes, Port Elizabeth Picture: DARYN WOOD
The Afrimat quarry in Greenbushes, Port Elizabeth Picture: DARYN WOOD

Building materials and industrial minerals group Afrimat expects profit to rise by as much as a half in its year to end-February, partially due to the contribution from its Demaneng iron ore mine in the Northern Cape.

The group said in a trading update it expects headline earnings per share (heps) to rise by between 38% and 58% from the prior period’s 234.1c, also reporting strong growth in its industrial minerals business. This business includes the production of agricultural lime, which is used to reduce soil acidity.

Heps is a widely used profit measure in SA which strips out exceptional items to give a better indication of the underlying performance of a business.

“Afrimat experienced a stable performance in the construction materials segment, strong growth from the industrial minerals businesses and a healthy contribution from the Demaneng iron ore mine,” the group said.

Afrimat had benefited from rising iron ore prices in 2019, and Demaneng produces high-grade ore. Afrimat acquired the mine, then known as Diro Iron Ore, in 2016 for R400m.

In morning trade on Thursday Afrimat’s share price was up 6.12% to R26, having fallen 21.66% so far in 2020.

gernetzkyk@businesslive.co.za