Afrimat (JSE:AFT) Operating Income : R1,182 Mil (TTM As of Feb. 2024)

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What is Afrimat Operating Income?

Afrimat's Operating Income for the six months ended in Feb. 2024 was R653 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Feb. 2024 was R1,182 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Afrimat's Operating Income for the six months ended in Feb. 2024 was R653 Mil. Afrimat's Revenue for the six months ended in Feb. 2024 was R3,240 Mil. Therefore, Afrimat's Operating Margin % for the quarter that ended in Feb. 2024 was 20.17%.

Good Sign:

Afrimat Ltd operating margin is expanding. Margin expansion is usually a good sign.

Afrimat's 5-Year average Growth Rate for Operating Margin % was 2.90% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Afrimat's annualized ROC % for the quarter that ended in Feb. 2024 was 17.41%. Afrimat's annualized ROC (Joel Greenblatt) % for the quarter that ended in Feb. 2024 was 29.82%.

Afrimat Operating Income Historical Data

The historical data trend for Afrimat's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Afrimat Operating Income Chart

Afrimat Annual Data

Trend

Feb15

Feb16

Feb17

Feb18

Feb19

Feb20

Feb21

Feb22

Feb23

Feb24

Operating Income

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588.56

895.23

1,026.31

908.55

1,181.65

Afrimat Semi-Annual Data
	Aug14	Feb15	Aug15	Feb16	Aug16	Feb17	Aug17	Feb18	Aug18	Feb19	Aug19	Feb20	Aug20	Feb21	Aug21	Feb22	Aug22	Feb23	Aug23	Feb24
Operating Income	Get a 7-Day Free Trial															461.41	462.04	446.52	528.18	653.47

Afrimat Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Feb. 2024 adds up the semi-annually data reported by the company within the most recent 12 months, which was R1,182 Mil.

Afrimat (JSE:AFT) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Afrimat's annualized ROC % for the quarter that ended in Feb. 2024 is calculated as:

	ROC % (Q: Feb. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Aug. 2023 )	+	Invested Capital (Q: Feb. 2024 ))	/ count )
=	1306.938 * ( 1 - 30.99% )	/	( (4953.115	+	5405.182)	/ 2 )
=	901.9179138	/	5179.1485
=	17.41 %

where

	Invested Capital		(Q: Aug. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	6333.986	-	948.581	-	( 432.29	-	max(0, 1286.842	-	1719.958	+	432.29	))
=	4953.115

	Invested Capital		(Q: Feb. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	6748.527	-	688.667	-	( 654.678	-	max(0, 1312.208	-	2054.228	+	654.678	))
=	5405.182

Note: The Operating Income data used here is two times the semi-annual (Feb. 2024) data.

2. Joel Greenblatt's definition of Return on Capital:

Afrimat's annualized ROC (Joel Greenblatt) % for the quarter that ended in Feb. 2024 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Feb. 2024 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Aug. 2023		Q: Feb. 2024
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	1230.738	/	( ( (3686.756 + max(256.869, 0))	+	(3898.037 + max(413.217, 0)) )	/	2 )
=	1230.738	/	( ( 3943.625	+	4311.254 )	/	2 )
=	1230.738	/	4127.4395
=	29.82 %

where Working Capital is:

	Working Capital		(Q: Aug. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(705.87	+	511.963	+	4.999)	-	(948.581	+	0	+	17.382)
=	256.869

	Working Capital		(Q: Feb. 2024 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(698.429	+	614.189	+	65.712)	-	(688.667	+	0	+	276.446)
=	413.217

When net working capital is negative, 0 is used.

Note: The EBIT data used here is two times the semi-annual (Feb. 2024) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Afrimat's Operating Margin % for the quarter that ended in Feb. 2024 is calculated as:

Operating Margin %	=	Operating Income (Q: Feb. 2024 )	/	Revenue (Q: Feb. 2024 )
	=	653.469	/	3239.606
	=	20.17 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

Afrimat Operating Income Related Terms

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Afrimat (JSE:AFT) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Building Materials » Afrimat Ltd (JSE:AFT) » Definitions » Operating Income

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Address

Corner Willie van Schoor Avenue and Old Oak Road, Tyger Valley Office Park No. 2, Tyger Valley, Bellville, WC, ZAF, 7530

Website

https://www.afrimat.co.za

Afrimat Ltd is a South Africa-based company. It operates in three segments: Construction Materials, which comprises aggregates, concrete-based products, and contracting operations; Industrial Minerals segment consists mainly of the sale of limestone, dolomite, and industrial sand; Bulk Commodities segment includes iron ore and anthracite; and Services segment consists of Group shared services including IT services, consulting services, etc. It operates in a single geographical segment, which is the African region.