AECI ex­pects head­line earn­ings per share to rise up to 35%

The Star Early Edition - - COMPANIES - Sandile Mchunu

SOUTH African-based ex­plo­sives and spe­cial­ity chem­i­cals com­pany, AECI, said in a trad­ing update yes­ter­day that it ex­pected in­creased earn­ings when the group presents its half year re­sults next week.

AECI ex­pects its head­line earn­ings per share (Heps) to be be­tween 381 cents a share and 396c for the six months to end June. This would mean an in­crease of be­tween 30 per­cent and 35 per­cent as com­pared to the same pe­riod in 2016.

“In com­pli­ance with the JSE list­ings re­quire­ments, share­hold­ers are ad­vised that for the half year to end June, AECI’s Heps is ex­pected to be be­tween 381c and 396c, that is 30 per­cent and 35 per­cent higher than the 293c re­ported for the half year to end June 2016. Earn­ings per share (Eps) is ex­pected to be­tween 380c and 394c, also 30 per­cent to 35 per­cent higher than the 292c re­ported for the prior cor­re­spond­ing pe­riod,” the group said.

AECI said in the prior cor­re­spond­ing pe­riod Heps and Eps were neg­a­tively af­fected by the set­tle­ment cost (non-cash) of AECI’s post-re­tire­ment med­i­cal aid li­a­bil­ity. The post-tax ef­fect of this was R98 mil­lion, or 93c a share.

AECI’s re­sults for the pe­riod are ex­pected to be re­vealed on or about July 26.

The re­vival in the agri­cul­tural sec­tor might just help to put the group on the right foot­ing.

AECI is fo­cused on pro­vid­ing prod­ucts and ser­vices to a broad spec­trum of cus­tomers in min­ing, man­u­fac­tur­ing, agri­cul­tural food and bev­er­age and gen­eral in­dus­trial sec­tors.

The group op­er­ates in five dif­fer­ent ar­eas, which are min­ing op­er­a­tions, wa­ter so­lu­tions, agro­chem­i­cals, food ad­di­tives and in­gre­di­ents, and ex­plo­sive and spe­cial­ity chem­i­cals.

In the six months to end June 2016, the busi­ness was neg­a­tively af­fected by a con­strained en­vi­ron­ment in South Africa and abroad. This con­strained en­vi­ron­ment led to lower prof­its as the group re­ported 42 per­cent de­cline in op­er­at­ing profit to R571m.

The com­pany, which has op­er­a­tions in more than 20 coun­tries, said both its core busi­nesses of min­ing and agri­cul­ture had un­der­gone a lean spell dur­ing the pe­riod with the fall in com­mod­ity prices and a drought that had crip­pled the agri­cul­tural sec­tor in south­ern Africa. How­ever, the re­vival in the agri­cul­tural sec­tor might just help to put the group on the right foot­ing.

At the be­gin­ning of 2017, the Crop Es­ti­mates Com­mit­tee pre­dicted that South Africa would record a har­vest maize crop in this har­vest­ing sea­son with 15.63 mil­lion tons.

The group’s chief ex­ec­u­tive Mark Dy­tor said the drought had cost the com­pany be­tween R30m and R40m in the last pe­riod. The im­proved rain­fall in sum­mer should give the group’s agri­cul­tural busi­ness a much-needed boost.

FILE PHOTO: NI­CHOLAS RAMA

Mark Dy­tor, the chief ex­ec­u­tive of AECI, said the im­proved rain­fall in sum­mer should give the group’s agri­cul­tural busi­ness a much-needed boost.

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