Afrimat sees an increase in H1 revenue

Affirmate, a company involved in the supply of building materials and iron ore mining, recently reported an increase in revenue despite facing challenges in the first half of the year. The company's revenue saw an 8% boost, driven largely by its iron ore mining segment. Peter DeWitt, the CFO of Affirmate, explained that the iron ore mine contributed $368 million to the revenue, although it was still in a ramp-up phase during the period. This resulted in operating profits rising by over 4%. However, headline earnings were down by 8%, primarily due to interest costs associated with debt taken on to purchase the iron ore mine. One of the key factors driving the success of Affirmate's iron ore business is the high demand for the company's high-quality iron ore in China. DeWitt highlighted that China's focus on clean energy has led to a surge in demand for clean-burning steel, which has benefited Affirmate's premium iron ore product. Despite concerns about slowing growth in China and uncertainties surrounding tariffs with the US, the company remains optimistic about the growth potential of its iron ore business. In terms of debt management, Affirmate plans to reduce its debt levels by leveraging the profits generated from its iron ore business. DeWitt expressed confidence in the profitability of the iron ore segment, stating that the business is currently generating favorable returns and is expected to contribute significantly to the company's overall revenue and profits moving forward. While the construction materials sector in South Africa, which forms a significant part of Affirmate's core business, has been facing challenges, DeWitt remains hopeful about future growth opportunities. Despite a decline in the sector compared to the previous year, the company has observed promising signs such as the awarding of small projects and increased orders. DeWitt also emphasized that the potential establishment of an infrastructure fund could further stimulate investment and drive growth in the construction materials segment. Overall, Affirmate's strong performance in its iron ore business has been a key factor in offsetting challenges faced by its construction materials segment. The company's strategic focus on debt reduction and capitalizing on the demand for high-quality iron ore bodes well for its future financial prospects.