JSE-listed Infrasors on Wednesday said its turnaround initiatives were bearing fruit, with headline earnings for the year ended February 28 up 70% to R16.38-million, compared with R9.63-million in the prior financial year.

Revenue rose 3% year-on-year to R337.3-million.

The company, in which JSE-listed Afrimat owns 50.7%, noted that although the higher revenue was offset by the costs incurred to improve plant efficiencies and productivity, the contribution from operations had increased by 33.2% year-on-year to R20.1-million. This was despite the lower gross profit generated by the operations.

A reduction in administration and operating expenses, mainly owing to the decrease in management fees charged by the holding company, as well as the impact of lower depreciation and amortisation, exceeded the drop in gross profit.

Infrasors posted a R15.4-million after-tax profit, compared with R4.9-million in the year before. 

Meanwhile, the company noted that activities in its silica segment remained under pressure owing to the depletion of high-grade raw material reserves at its opencast Delf Sand operations, near Cullinan.

Delf Sand obtained the shortfall in raw materials from the Delf Cullinan silica deposit and transported the raw materials to the Delf Sand processing plant, which resulted in a sharp increase in transport costs, which, in turn, led to reduced sales of low-margin products.

Further, the metal industry strike impacted sales volumes during the first half of the year.

Infrasors highlighted, however, that its dolomite and limestone segments increased profitability owing to improved processing efficiencies and higher selling prices.

“The turnaround initiatives throughout the group are continuing with enhanced plant availability, improved production throughput with higher sales margins being realised. These initiatives required increased expenditures on maintenance of plant and equipment which were expensed during the year.

“We expect to remain a leading supplier to the local construction and metallurgical markets and should further also benefit from production efficiency improvement initiatives. Our key focus areas will remain on expanding volumes, further reducing costs, continually improving efficiencies and developing the required skill level of our employees,” Infrasors said in a statement.