AECI
LIMITED
(Incorporated
in
the
Republic
of
South
Africa)
(Registration
number: 1924/002590/06)
Tax
reference number: 9000008608
Share
code: AFE ISIN: ZAE000000220
Hybrid
code:
AFEP ISIN: ZAE000000238
Bond
company code: AECI
LEI:
3789008641F1D3D90E85
(AECI
or
the
Company
or
the
Group)
AUDITED
CONSOLIDATED FINANCIAL RESULTS AND FINAL CASH DIVIDEND DECLARATION
FOR THE YEAR ENDED 31 DECEMBER 2024,
AND CHANGES TO THE BOARD OF DIRECTORS AND BOARD
COMMITTEES
·
Revenue
from
continuing
operations
down
3.8%
to
R33
598
million
·
EBITDA1
from
continuing
operations
down
12.7%
to
R3
034
million
·
Profit
from
operations
(continuing
operations)
down
36.8%
to
R1
544
million
·
Headline
earnings
per
share
down
37.0%
to
716
cents
·
Basic
loss
per
share
of
268
cents
(2023:
earnings
per
share
1
112
cents)
-
Basic
earnings
per
share
from
continuing
operations
down
74.8%
to
263
cents
-
Basic
loss
per
share
from
discontinued
operation
of
531
cents
(2023:
earnings
per
share
69
cents*)
·
Working
capital
at
16%
of
revenue
within
target
range
·
Gearing
at
31%
(35%
in
2023)
within
target
range
·
Final
cash
dividend
of
219
cents
per
share
(2023:
119
cents)
1 Earnings
before interest, taxation, depreciation and amortisation (EBITDA)
calculated as profit from operations and equity-accounted investees
plus depreciation, amortisation and impairments.
*
Restated
2024:
A
YEAR
OF
TRANSITION
AND
STRATEGIC
INVESTMENT
FOR
AECI
Our stated
ambition as the AECI Group is to double the profitability of our
core businesses by 2026 and secure a global market position of #3
in mining by 2030.
As
2024
was
the
first
full
year
of
execution
against
our
new
strategy,
the
Group
made
some
necessary
concessions
which are
key
enablers
in
the
successful
execution
of
the
strategy.
The
reported
results
reflect
the
impact
of
these
strategic enablers
which
include
strategic
divestments,
transformation
investments,
and
one-off
impairments.
These
enablers underpin
the
transitionary
phase
of
our
strategy
and
form
a
platform
on
which
the
Group
can
build
towards
achieving strong and sustainable future performance.
We
made
steady
progress
with
rolling
out
the
strategy,
which
resulted
in:
·
Implementing
our
new
operating
model
·
Rolling
out
our
leadership
compact
and
culture
code
·
The
signing
of
sale
agreements
for
AECI
Animal
Health
and
AECI
Much
Asphalt
·
Delivering
an
EBITDA
run
rate
of
R800
million
for
the
year
and
converting
R504
million
of
the
run
rate
into
profit and
loss
·
Gaining
traction
with
our
globalisation
strategy
by
leveraging
our
exceptional
chemical
expertise
to
further
internationalise our business, expand into Peru, and significantly enhance our presence
in Australia.
The
achievement of these strategic milestones is essential for
establishing the foundations the Group needs in order to fulfil its
ambitions.
Statement
from
the
Group
Chief
Executive
Officer
"2024
has
been
a
transformative
year
for
the
Group,
with
significant
progress
made
against
our
strategy
execution
programme. While
we
made
concessions
that
affected
the
Group's
financial
performance
for
the
year,
our
progress
and achievements to date in executing the strategy reinforce our
confidence in our ability to meet our long-term strategic
ambitions."
GROUP
RESULTS
OVERVIEW
FOR
2024We
are
committed
to
sustainability
stewardship
No
fatalities were recorded in the period under review. The Group's
12-month rolling total recordable injury rate improved to 0.30 from
0.35 as at 31 December
2023.
During
the
review
period,
we
reduced
our
potable
water
consumption
by
2%,
the
water
that
we
discharged
into
the
sea or sewer by 7%, and our CO2
footprint by 1% in comparison to our prior year
performance.
SEGMENT
REVIEW
Until
31 December 2023, our operating
businesses were structured into four key segments: AECI Mining,
AECI Water, AECI
Agri
Health
and
AECI
Chemicals.
In
line
with
our
strategy
of
optimising
our
portfolio
to
create
a
platform
for growth,
we
have
restructured
our
reporting
segments
to
AECI
Mining,
AECI
Chemicals,
AECI
Property
Services
and Corporate and AECI Managed Businesses. The comparative numbers
have been restated as required by International Financial Reporting
Standards 8, Operating
Segments.
AECI
Mining
The
businesses in this segment provide a comprehensive mine-to-mineral
solution for the international mining sector. Their services
encompass commercial explosives, initiating systems, blasting
services, surfactants for explosive manufacture, and chemicals for
ore beneficiation and tailings treatment.
AECI
Mining's
operational performance
for the
year was mainly impacted by weak market conditions
coupled with inefficient global
logistics.
The
businesses'
available
operating
capacity
in
the
first
half
of
the
year
was
impacted
by a catch
of four planned statutory shutdowns which were deferred from the
prior years. These shutdowns resulted in the
alternate
sourcing
of
ammonium
nitrate
at
higher
prices
which
fall
outside
the
scope
of
our
rise
and
fall
pricing
mechanism with our clients. AECI Mining's operational performance
significantly improved in the second half of 2024, particularly in
the fourth quarter.
The year
was characterised by low ammonia market prices which were
influenced by declining natural gas prices and shifts
in
trade.
Sales
volumes
of
bulk
explosives
increased
by
4.4%
from
the
prior
year,
bolstered
by
increased
volumes in Australia and partially
offset by reduced offshore volumes impacted by shipping delays.
Profit from operations fell
by
24.8%
to
R1
550
million
(2023:
R2
060
million)
owing
to
a
weak
market,
R204
million
expenditure
on the catch up of planned statutory shutdowns and R135 million
impairments on property, plant and equipment and intangible
assets.
In
the
fourth
quarter
of
the
2024
financial
year,
the
average
monthly
EBITDA
run
rate
exceeded
the
prior
year's
and
the average
for
the
first
three
quarters
of
the
2024
financial
year,
owing
to
strong
performance
in
Central
Africa and
Australasia. This was supported by robust mining activity, which
helped offset subdued growth in other regions, alongside enhanced
utilisation of manufacturing assets that reduced the cost of
alternative sourcing. This is promising for the 2025 financial
year.
AECI
Chemicals
This
segment includes AECI Industrial and Speciality Chemicals, which
focus on blended chemical products and bulk chemicals; AECI Agri
Health, which concentrates on crop protection and plant nutrients;
and AECI Water, which specialises in water treatment chemicals and
technology equipment plant.
The
segment's
performance
was
impacted
by
ongoing
challenges
in
the
South
African
manufacturing
and
industrial
sectors, along with an oversupply of key products that exerted
pressure on pricing and demand. Despite these challenges, the
business achieved a significant increase in profit from operations,
driven by disciplined cost management and enhanced operational
efficiencies. Profit from operations increased by 30.0% to R823
million (2023: R633 million, restated).
AECI Agri
Health profit from operations rose by 45.9% compared to the
previous year. Agri's Malawian business demonstrated improved
performance following the effects of currency devaluation in 2023.
AECI Specialty Chemicals reported
flat
profit
from
operations
due
to
reduced
off-takes
from
key
clients.
AECI
Industrial
Chemicals
profit from operation declined by 19.4% on the back of lower sales
volumes of sulphuric acid and a statutory shutdown that occurred in
April 2024. AECI Water, which
includes the public water business earmarked for divestment,
recorded an increase in profit from operations by 65.9%. The public
water business continued to underperform during the 2024 financial
year.
AECI
Managed
Businesses
This
segment houses businesses earmarked for sale, including AECI
Schirm, Animal Health, SANS Fibers and Food and
Beverage.
Progress
has been made regarding our divestment strategy, following the
signing of sale agreements for AECI Much Asphalt
(classified
as
a
discontinued
operation)
and
AECI
Animal
Health,
two
of
the
six
targeted
divestments.
These transactions are expected to close in the first half of the
2025 financial year.
The
segment reported an operational loss of R383 million (2023: R298
million loss, restated) with all businesses, except AECI Schirm,
reporting profits.
AECI
Property
Services
and
Corporate
The
activities of AECI Property Services and Corporate relate mainly to
property leasing and management in the office, industrial
and
retail
sectors.
Corporate
covers
centralised
functions
including
Treasury
and
Finance;
Human
Capital; Environment; Health and Safety, Stakeholder Relationships;
Company Secretarial; Legal, Risk and Compliance; Sustainability;
Information Technology and Strategy Execution.
This
segment recorded a loss of R1 330 million, compared to earnings of
R106 million in 2023. Current year earnings include an
inter-company impairment of R970 million relating to an investment
in AECI Much Asphalt which is eliminated at Group level against
inter-segments. The prior year's reported figure included an
insurance recovery of
R184
million
(2023:
R39
million).
Restructuring
costs,
including
the
establishment
of
the
Transformation
Management Office (TMO), are accounted for in the period under
review.
GROUP
FINANCIAL
PERFORMANCE
Reclassification
of
AECI
Much
Asphalt
to
a
discontinued
operation
On
4
November
2024,
AECI
entered
into
a
Share
Purchase
Agreement
with,
inter
alios,
Old
Mutual
Private
Equity,
to dispose
of
100%
of
its
shareholding
in
AECI
Much
Asphalt,
for
an
estimated
final
consideration
of
R1
100
million
(subject to any final adjustments on the locked-box structure). The
sale is progressing as expected, with all regulatory approvals now
obtained. The remaining condition precedent (finalisation of the
locked-box exercise) is expected to be met in the first half of
2025.
As a
result, in accordance with IFRS 5 (Non-current Assets Held for Sale
and Discontinued Operations), AECI Much Asphalt has been classified
as a discontinued operation, and prior year figures have been
restated
accordingly.
Results
Group
revenue
from
both
continuing
and
discontinued
operations
decreased
by
2.7%
to
R36
497
million
(2023: R37
500
million)
for
the
year,
due
to
challenging
market
conditions
in
South
Africa and
low
ammonium
prices.
Revenue from
continuing
operation
declined
by
3.8%
to
R33
598
million
and
revenue
from
discontinued
operations
increased by 13.3% to R2 899 million.
Group
EBITDA from both continuing and discontinued operations of R3 314
million (2023: R3 682 million) was 10.0% lower than the previous
year, primarily driven by R860 million in once-off investment
costs. The majority of these costs were primarily geared towards
successfully achieving our 2026 ambition, and is outlined as
follows:
·
R860
million
in
once-off,
included
the
following:
-
R467
million
in
transformation
project
costs;
-
R186
million
in
divestiture
costs;
-
R204
million
of
investment
spend
on
statutory
shutdowns;
and
-
R56
million
(2023:
R159
million)
of
AECI
Schirm
Germany turnaround
spend;
-
partially
offset
by
insurance
recoveries
of
R53
million
(2023:
R184
million).
The
decrease
in
Group
EBITDA
was
partially
offset
by
the
TMO's
delivery
of
R504
million
uplift.
Prior
year
reported
EBITDA included a R159 million once-off payment on the employee
share trust.
With
the
exception
of
the
extraordinary
items
mentioned
above,
EBITDA
from
both
continuing
operations
and
discontinued operations was in line with the prior year.
EBITDA
from continuing operations was R3 034
million (2023: R3 474) after
accounting for once-off costs amounting to R873 million (2023: R81
million), partially offset by TMO uplifts of R504 million. EBITDA
from discontinued operations was R280 million (2023: R208
million).
The
Group
assesses
its
Net
Asset
Value
(NAV)
in
relation
to
its
fair
value
less
costs
to
sell
annually
and
evaluates
fair value
adjustments
upon
disposal.
This
resulted
in
the
recognition
of
an
impairment
of
R1
109
million
(2023: R20 million) for the year, distributed as
follows:
|
Rand
million
|
Property,
plant
and equipment
|
Right-of-Use Assets
|
Intangible Assets
|
Goodwill
|
Total
2024
|
|
AECI
Mining
|
86
|
2
|
42
|
5
|
135
|
|
AECI
Managed
Business
|
220
|
-
|
-
|
22
|
242
|
|
Discontinued
operations
(AECI
Much
Asphalt)
|
14
|
-
|
8
|
710
|
732
|
|
Net
impairment
and
derecognition
of assets
|
320
|
2
|
50
|
737
|
1
109
|
These
impairments negatively impacted Group earnings, however they are
non-cash and reflect the strategic repositioning of the Company to
create long-term shareholder value. Impairments attributable to
continuing operations were R377 million (2023: R20 million) and
R732 million (2023: Rnil) were attributable to discontinued
operations.
Depreciation
and
amortisation for
the Group
at R1 154
million (2023: R1
053
million), was
9.6%
higher than in the prior year due to growth capex in AECI Mining
Australia and AECI Schirm USA.
Depreciation and amortisation attributable to continuing operations
was R1 084 million (2023: R972 million) and R70 million (2023: R 81
million) was attributable to discontinued operations.
The
Group's profit from operations declined to R1 022 million from R2
571 million in the prior year due to one-off costs and the
recognition of impairments as disclosed above. Profit
from
operations on continuing operations was R1 544
million (2023: R2 444
million) and discontinued operations recorded a loss of R522
million (2023: R127 million earnings, restated) after taking into
account the impact of one-off costs and impairments.
Net
finance
costs,
from
continuing
operations,
increased
to
R521
million
(2023:
R504
million)
and
includes
R35 million interest paid on a tax matter.
Tax
expense from continuing operations for the 2024 financial year was
R747 million and represents an effective tax rate (ETR) of 71%, up
from 44% in 2023. The elevated ETR resulted from higher
non-deductible expenses, impairments and foreign withholding taxes
from increased dividends received from the foreign subsidiaries.
The necessary resources have been made available to assist in
developing solutions that will reduce the rate into a manageable
range.
The
Company
recorded
a
basic
loss
per
share
of
268
cents
(2023:
earnings
of
1
112
cents)
split
between:
-
basic
earnings
per
share
from
continuing
operations
of
263
cents
(2023:
1
043
cents,
restated);
and
-
basic
loss
per
share
from
discontinued
operations
of
531
cents
(2023:
earnings
of
69
cents,
restated).
Headline
earnings
per
share
from
continuing
and
discontinued
operations
amounted
to
716
cents
(2023: 1
137 cents).
Net debt
decreased to R3 738 million (2023: R4 338 million), translating to
a gearing ratio of 31% (2023: 35%), which was
well
within
the
Group's
guidance
of
20%
-
40%.
Net
debt
to
EBITDA,
as
defined
in
covenant
agreements,
was 1.2 times (2023: 1.2 times), remaining well within the loan
covenant threshold of 2.5 times. Cash and cash equivalents were R2
358 million (2023: R1 901 million).
Net
working capital as a percentage of revenue (WC%) was 16% (2023:
15%), which falls within the Group's guidance of
14%
to
16%.
Pleasingly,
AECI
Mining's
WC%
of
13%
was
lower
than
the
target
and
demonstrates
the effort
and commitment made towards effectively managing working
capital.
Capex for
the period was R973 million (2023: R1 303
million), of which R765 million (2023: R869 million) was for
maintenance, and
R208
million
(2023:
R434
million)
was
for
expansion.
AECI
Mining
accounted
for
R619
million
of the
total spend after spending on statutory shutdown maintenance and
new contract wins in Australia.
OUTLOOK
2024 has
set a strong platform from which the Group can build and grow
towards meeting its 2026 strategic ambitions. In 2025, our
attention moves from the transition phase of our strategy to
execution phase with an emphasis on driving hard cost savings,
preparing for growth and focusing on free cashflow
generation.
Key
focus
areas
for
FY2025
include:
·
Driving
structural cost optimisation, margin improvement, investment into
market growth, unlocking headcount efficiencies and consolidating
offices.
·
Achieving
the
2025
TMO
targets
linked
to
the
overall
2026
saving
of
R2.4
billion.
·
Reinvesting
in
asset
health
to
mitigate
future
business
disruption
risks.
·
Continuing
to
position
AECI
Mining
for
growth
and
improved
operational
performance
by:
·
maintaining
the
good
performance
momentum
recorded
in
the
fourth
quarter
of
2024,
·
investing
in
growth
capital
as
guided
by
the
capital
allocation
framework,
and
·
internationalisation
of
the
business
with
AECI
Mining
Chemicals
at
the
forefront.
·
Continue
exploring
and
exploiting
synergies
between
AECI
Mining
and
AECI
Mining
Chemicals.
·
Advancing
the
divestments
programme
and
optimising
the
balance
sheet
to
enhance
capital
allocation.
·
Continue
strengthening
our
leadership
critical
skills
and
capacity,
including
the
roll-out
of
the
culture
journey.
DIVIDEND
Declaration
of
final
ordinary
cash
dividend
No.
181
The
Company's
board
of
directors
(Board)
is
pleased
to
announce
that
it
has
resolved
to
declare
a
gross
final
cash
dividend of
219.00
cents
per
ordinary
share
in
respect
of
the
financial
year
ended
31
December
2024.
The
dividend
is payable on Monday, 14 April 2025
to holders of ordinary shares recorded in the register of the
Company at the close of business on the record date, being Friday,
11 April 2025.
The
last
day
to
trade
"cum"
dividend
will
be
Tuesday,
8
April
2025
and
shares
will
commence
trading
"ex"
dividend
as from the commencement of trade on Wednesday, 9 April 2025.
A
South
African
dividend
withholding
tax
of
20%
will
be
applicable
to
all
shareholders
who
are
not
either
exempt
or
entitled to a reduction of the withholding tax rate in terms of a
relevant Double Taxation Agreement, resulting in a net final cash
dividend of 175.20 cents per ordinary
share payable to those shareholders who are not eligible for
exemption or
reduction.
Application
forms
for
exemption
or
reduction
may
be
obtained
from
the
Transfer
Secretaries
and must be returned to them on or before Tuesday, 8 April 2025.
The
issued
share
capital
of
the
Company
at
the
declaration
date
is
105
517
780
listed
ordinary
shares,
and
3 000
000 listed
cumulative preference shares. The dividend has been declared from
the income reserves of the
Company.
Any
change
of
address
or
dividend
instruction
must
be
received
on
or
before
Tuesday,
8
April
2025.
Ordinary
shares
may
not
be
dematerialised
or
rematerialised
between
Wednesday,
9
April
2025
and
Friday,
11 April 2025, both days
inclusive.
AVAILABILITY
OF
THE
AUDITED
CONSOLIDATED
FINANCIAL
RESULTS
FOR
THE
YEAR
ENDED
31 DECEMBER 2024
The
Group's full audited consolidated financial statements for the year
ended 31 December 2024, including the
opinion of the independent auditor, are available for inspection at
the Company's registered office and are also available through the
JSE cloud link at:
https://senspdf.jse.co.za/documents/2025/jse/isse/AFE/AFSFY2024.pdf
and on the
Company's website at:
https://www.investor.aeciworld.com/results-reports-presentations.php#results
This
short-form announcement is the responsibility of the Board and has
not been audited. The information disclosed is only a summary of
the information in the full audited financial statements and does
not contain full or complete details.
Any
investment decisions made by Shareholders and/or investors should
be based on the full audited annual financial statements.
Shareholders and/or investors are encouraged to review these
audited annual financial statements, available for viewing
via
the links
provided above, as this announcement does not provide all of
the
details.
Any
reference to future financial performance included in this
announcement has not been audited or reported on by the Company's
external auditors.
AUDIT
OPINION
Deloitte
& Touche, the Group's independent auditor, has audited the
consolidated and separate annual financial statements of the Group
and has expressed an unmodified audit opinion thereon.
In
accordance with the auditors' responsibilities in terms of section
45 of the Auditing Profession Act, the auditors reported
that,
during
2024,
a
reportable
irregularity
was
identified
in
terms
of
the
Auditing
Profession
Act.
The
matter was
reported to the Independent Regulatory Board for Auditors.
Further
details on the matter pertaining to the reportable irregularity, is
described in note 39 of the Group's full audited consolidated
financial statements for the year ended 31
December 2024, available on the Company's
website.
CHANGES
TO
THE
BOARD
OF
DIRECTORS
AND
BOARD
COMMITTEES
In
compliance
with
paragraph
3.59
of
the
JSE
Limited
Listings
Requirements,
AECI
shareholders
and
noteholders
are hereby advised that, after serving as a member of the Board for
9 years and in line with good corporate governance
practices,
Dr
Khotso
Mokhele,
the
current
chairperson
of
the
Board,
has
elected
to
retire
as
a
director
of the
Company
at
the
conclusion
of
the
upcoming
annual
general
meeting
of
AECI,
expected
to
be
held
on
27
May 2025 (2025 AGM). Ms Philisiwe Sibiya, an independent
non-executive director of the Company, will assume the role of
chairperson of the Board thereafter, having been so elected by the
Board.
The Board
would like to express their appreciation to Dr Mokhele for his
valuable leadership during his tenure as chairperson and wishes Ms
Sibiya well in her new role.
Dr Mokhele
will accordingly retire as a member of the Social, Ethics and
Sustainability Committee and Remuneration and Human Capital
Committee, and as chair of the Nomination, Governance and
Directors' Affairs Committee and Investment, Innovation and
Technology Committee effective at the conclusion of the 2025
AGM.
AECI
shareholders
and
noteholders
are
further
advised
of
the
following
appointments
to
the
Board
committees
with
effect from 25 February
2025:
-
Mr
Steven
Dawson,
an
independent
non-executive
director,
has
been
appointed
as
a
member
of
the
Nominations, Governance and Directors' Affairs
Committee;
-
Mr
July
Ndlovu,
an
independent
non-executive
director,
has
been
appointed
as
a
member
of
the
Investment,
Innovation and Technology Committee; and
-
Mr
Billy
Mawasha,
an
independent
non-executive
director,
has
been
appointed
as
a
member
of
the
Safety,
Health and Environment Committee.
The Board
thanks the abovementioned directors for accepting their
appointments as members of the respective committees and looks
forward to their ongoing contribution to the AECI group.
Directors:
KDK
Mokhele
(Chairman),
H
Riemensperger1
(Group
CE),
ST
Coetzer2,
SA
Dawson3,
FFT
De
Buck,
WH
Dissinger1,
P Mishic O'Brien4,
AM Roets, PG Sibiya, N Moholi, J Ndlovu, B Mawasha
1 German
2 Canadian
3 Australian
4 American
Investor Relations Manager: I
Lepere
Group
Company Secretary: C Singh Board sign-off
date:
25
February
2025
Results
released
on:
26
February
2025
Equity
Sponsor:
One
Capital
Debt
Sponsor:
Questco
Proprietary
Limited
Registered
office
First
floor,
AECI
Place,
24
The
Woodlands,
Woodlands
Drive,
Woodmead,
Sandton
Share
transfer
secretaries
Computershare
Investor
Services
Proprietary
Limited,
Rosebank
Towers, 15
Biermann Avenue, Rosebank, 2196
and
Computershare
Investor
Services
PLC,
PO
Box
82,
The
Pavilions,
Bridgwater Road, Bristol BS 99 7NH, England
