Afrimat Share Price (JSE: AFT) Breaks Resistance and Regains Momentum with 92% Earnings Jump
Afrimat’s stock is showing the first clear signs of recovery after a challenging year, driven by improved operational results and renewed...
Quick overview
- Afrimat's stock is rebounding after a significant decline, with an 11% surge following positive earnings guidance.
- The company reported a 92.3% increase in headline earnings per share, driven by improved performance in its cement and iron ore divisions.
- Technical indicators suggest a trend reversal, as key resistance levels have been breached, signaling renewed investor confidence.
- Despite challenges in the cement division, overall financial recovery is evident, with substantial revenue growth and improved cash flow.
Afrimat’s stock is showing the first clear signs of recovery after a challenging year, driven by improved operational results and renewed investor optimism.
Afrimat Rebounds After Year of Declines
After a steep decline that saw its share price drop from above R72 to just R36 in September, Afrimat (JSE: AFT) is staging a strong comeback. This week, the stock surged nearly 11%, buoyed by upbeat guidance for its headline earnings per share (HEPS) for the six months ending August 31. The rebound has lifted investor sentiment and suggests that the worst may be over for the mining and materials company.
Technical Breakthrough Points to Trend Reversal
Afrimat’s price action has turned notably bullish after breaking above critical resistance levels. Throughout 2025, both the 50-day (yellow) and 100-day (green) simple moving averages acted as barriers, capping any upside attempts. However, those resistance zones were breached in October, with the 50-day SMA now flipping into a new support level—a classic technical signal of a trend reversal.
AFT Chart Weekly – The 20 SMA Was Broken This Week
On the weekly chart, the 20-week SMA, which had served as resistance for much of the year, was also broken this week as the stock rallied to R47 on Friday before trimming gains slightly to close at 4,437.00 ZAC—still up 11% for the week.
Strong Earnings Drive Momentum
Afrimat’s financial recovery is starting to take shape. The company reported a substantial 92.3% increase in headline earnings to 101.9 cents per share for the six months to August 31. This performance was underpinned by a marked improvement in its cement division and higher iron ore sales volumes, reflecting the benefits of strategic adjustments across operations.
Afrimat Interim Earnings Report — Strong Recovery Across Divisions
Headline and Financial Performance
- Headline earnings per share (HEPS) surged 92.3% to 101.9 cents for the six months ending August 31, driven by stronger iron ore sales and improved performance in the cement segment.
- Group revenue jumped 29.9% to R5.3 billion, while operating profit rose 29.8% to R379.8 million.
- Interim dividend was doubled to 20 cents per share, reflecting renewed confidence in cash flow and profitability.
- Taxed profit advanced 78.9% to R173.5 million, underscoring significant financial recovery.
Iron Ore and Bulk Commodities Lead Growth
- Local iron ore sales climbed sharply to 830,662 tons from 339,648 tons, while exports rose to 396,384 tons from 349,084 tons.
- The Bulk Commodities division reported a 53.6% rise in revenue and a 56.8% increase in operating profit.
- Iron ore mines contributed heavily, with revenue up 77.9% to R1.7 billion, reflecting both volume growth and favorable market conditions.
Debt and Cash Flow Management
- Group finance costs rose to R148.4 million, but management noted ongoing efforts to reduce debt through asset sales and streamlined operations.
- The debt-to-equity ratio stood at 52.5%, slightly higher than in February 2025.
- Cash generation improved substantially to R357.7 million, compared to cash used of R131.4 million in the same period last year, highlighting better operational efficiency.
Aggregates, Fly-Ash, and Cement Divisions
- The Aggregates and Fly-Ash division saw revenue growth of 9.1% to R1.9 billion, while operating profit increased to R321.2 million from R290.1 million.
- Cement business revenue surged 118.8% to R873.7 million, signaling strong demand recovery.
- Despite higher sales, the cement unit remained loss-making due to kiln reliability issues, though production disruptions eased toward the end of the period.
CEO Andre van Heerden highlighted that “the group made several key improvements, and the results are becoming tangible.” While the cement business saw a strong rise in sales, it has yet to reach profitability due to kiln reliability challenges. Similarly, the phosphate division continued to expand but is still in its build-up phase, according to CFO Pieter de Wit.
Outlook: Rebuilding Confidence and Growth
Afrimat’s latest results and technical breakout suggest that confidence is returning to the stock after a prolonged downturn. Continued improvement in operational performance, combined with stronger commodity prices and efficiency gains, could set the stage for a more sustained recovery in the months ahead.
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