Pieter de Wit: Afrimat's exceptional performance has positioned it to weather Covid-19

CFO Pieter de Wit says Afrimat has been very conservative with its balance sheet, in case of turmoil.

Afrimat has reported a 48.5 percent rise in headline earnings for the year ended 29 February, maintaining an average growth in headline earnings per share of 21.6 percent per annum for 11 years. 

This healthy balance sheet has enabled Afrimat to seek opportunities through the lockdown, such as participating in commodity projects or acquiring and turning around companies in distress. 

“We were always very conservative with gearing on our balance sheet, for in case there is a significant worsening in the economy and the industries we operate in,” says Afrimat CFO Pieter de Wit. “The exceptional performance of the business for the February 2020 financial year placed Afrimat in a good position to weather the current economic turmoil and to capitalise on opportunities that will arise.”

According to a press release, the group has zero debt with some cash, which has given it the fire power to participate in potentially “exciting” projects in the commodity space, as many companies in this space are finding it difficult to access finance for their projects through lockdown.

Pieter says that Afrimat’s relentless drive to find talent and develop it, especially among its youngest employees, has played a significant role in the group’s performance over the last decade, and has formed a cornerstone of the company’s transformation strategy. 

The group also decided not to declare a final dividend at this stage, as it supports Afrimat’s general conservative nature and ensures the further preservation of cash. 

The highlights of Afrimat’s results included: 

  • External revenue improved by 11.4 percent to R3.3 billion in the year.
  • Operating profit increased by 27.5 percent to R601 million. 
  • Net cash from operating activities increased 64.9 percent to R676.8 million, which resulted in a decrease of the net debt-equity ratio from 23.8 percent in the prior year to 8.2 percent in the current year.