AECI, the chemicals and explosives group in transition, lowered its final dividend 79% to 119 cents in the year to December 31, but its core mining division saw record results, and group debt reduction targets were met.
Revenue increased 5.4% to R37.5 billion. Ebit (earnings before interest and tax) reached R2.57bn, up 25.6% over the prior year. Headline earnings per share fell 11.7% to 1 137 cents. Gearing fell to 35% from 45%.
On ESG goals, scope 1 and 2 emissions, water consumption and water discharge elements decreased. The board and executive committee female representation exceeded the 40% target.
“Aligned with our strategy of fortifying a resilient balance sheet, net gearing significantly improved to 35%, down from 45%, and firmly within our guidance range of 20% to 40%. Furthermore, net debt substantially reduced to R4.34bn from R5.35bn, propelled by the high interest rate environment and stringent management of net working capital,” the group said.
The results were achieved in a year of transition for the group and within an operating environment characterised by high inflation and interest rates, logistical challenges within supply chains and declining commodity prices. The transition included, for instance, a new executive team.
Group CEO Holger Riemensperger said,“This resilience was particularly evident within AECI Mining, our core business and primary growth driver.”
“As we celebrate a century of unwavering dedication and pioneering excellence, we continue to deliver positive results, in spite of the prevailing challenging environment. The encouraging performance... underscores our strategic decisions,” he said.
A further reduction in debt, and tighter net working capital management remained focus points for the executive leadership.
“Operational and strategic endeavours are under way to fortify our balance sheet, ensuring a solid foundation for the future,” said Riemensperger.
AECI Mining’s revenue increased 8.4% to R19.62bn, with an all-time record Ebit of R2.06bn, an 18% jump from 2022. The growth was propelled by market share gains from new contracts internationally. Revenue from outside South Africa increased to 69% from 64% in 2022.
AECI Chemical, the South Africa-focused business, saw revenue fall 4% to R8.16bn. EBIT fell 8% to R515 million. Free cash flow significantly improved to R469m from R113m.
AECI Agri Health lifted revenue 8% to R7.62bn. An Ebit loss of R192m was negatively impacted by losses in AECI Schirm, coupled with the South African market downturn and once-off costs.
AECI Water’s revenue was steady at R2.01bn despite challenges in the public water business. Once-off costs reduced Ebit to R139m (R212m).
Riemensperger said the company remained committed to the operational and structural changes, and the group was on a good trajectory to achieve its 2026 targets.
BUSINESS REPORT