JSE-listed construction materials and industrial minerals company Afrimat expects to report a 74% to 79% year-on-year increase in earnings per share (EPS) to between 101.4c and 104.3c for the six months ended August 31.

Headline earnings per share (HEPS), meanwhile, are expected to be 90% to 95% higher year-on-year at between 100.7c and 103.4c.

The improvement in earnings across the comparative periods is largely owing to improvements across several key areas of the group, Afrimat notes in a trading statement published on October 7.

The aggregate components of this segment had a slow start to the first quarter of the financial year, but experienced a marked improvement in sales volumes, with enhanced operational efficiency at the acquired Lafarge quarries in the second quarter of the six-month period, and the recovery of previously lost market share.

This was achieved by improving customer service and ensuring product availability, Afrimat says.

Further, Afrimat's fly ash business is experiencing solid growth in volume and profitability after the successful completion of several key projects. Notably, July was the highest volume month since the business was acquired.

“We are confident in our ability to sustain this momentum in the second half of the year, supported by strong demand and increased operational capacity,” the company says.

Results for the cement business in the first-half are expected to be loss-making. However, plant reliability has been significantly improved and production disruptions have decreased.

The operation continues to benefit from strong product demand and its strategic positioning as a low-carbon, high-quality cement is proving to be the correct one.

In terms of the company's bulk commodities, a significant increase in local iron-ore sales volumes was recorded when compared to the comparative period of the prior financial year.

Afrimat has worked hard to ensure sustainable sources of supply and continues to meet the needs of its customers. Volumes increased to 830 662 t, up significantly from the 339 648 t in the six-month period to August 31, 2024, it says.

Iron-ore export volumes increased to 396 384 t, up slightly on the 349 084 t to end-August 2024.

The expectation is that the full-year volumes will be similar to the previous year, but about 17% below Afrimat's yearly allocation of 870 000 t/y, primarily owing to logistics availability on the Saldanha export line owing to a maintenance shutdown of the line during the second half of the financial year.

Meanwhile, operational improvements at Nkomati anthracite mine were successfully implemented and, with a full environmental-impact assessment in place, Nkomati processed 100 000 t through the plant in July. An assessment of underground viability led to the mothballing of the underground mining operation.

Further, owing to decreased demand from ferrochrome smelters during the period, volumes amounted to 136 216 t, down on the 155 686 t report to end August 2024.

“Unfortunately, in August, owing to structural economic impediments in the local economy, all ferrochrome smelters were temporarily shut down,” Afrimat reports.

Also in its bulk commodities businesses, the Mozambique border has reopened, and two shipments of anthracite were exported, totalling 61 861 t, up from 41 568 t to end-August 2024, with additional shipments expected for the remainder of the current financial year.

“Management is currently assessing viable options for the Nkomati mine to minimise the impact of the ferrochrome smelters' prolonged shutdown. We will update shareholders on the progress when we have better clarity.”

Further, while industrial minerals are a small part of the group, orders from the agricultural sector arrived late owing to delayed rainfall and subsequent planting, and these volumes will reflect in the second half of the financial year.

This segment was impacted by reduced volumes resulting from the shutdowns of ferrochrome smelters, it adds.

In terms of future materials and metals, Afrimat is encouraged by promising applications in the battery and magnet markets, significant progress has been achieved with local operators and international processes to leach and extract rare earths from stockpiles.

The economics of these applications and plant requirements are still three years away, but they should not require any additional capital investment from Afrimat.

Sales of phosphate material in the agricultural market are ensuring steady cash flow for the Glenover project, with operating losses decreasing, the company states.

Afrimat expects to release its financial results for the interim period on or about October 23.