AECI Limited - Audited Consolidated Financial Results and Final Cash Dividend Declaration for the year ended 31 December 2023
(Incorporated in the
(Registration No. 1924/002590/06)
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
-- Revenue up 5.4% to R37 500 million -- EBITDA1 up 3.2% to R3 683 million -- EBIT2 up 25.6% to R2 571 million -- HEPS down 11.7% to 1137 cents -- EPS up 26.7% to 1112 cents -- Cash generated from operations up 4.3% to R4 004 million -- Growth capex of R434 million (33% of total R1 303 million capex) -- Working capital at 15% of revenue, down from 19% in 2022 -- Gearing at 35% (45% in 2022) -- Final cash dividend down 79% to119 cents per share
1 Earnings before interest, taxation, depreciation and amortisation calculated as profit from operations and equity-accounted investees plus depreciation, amortisation and impairments.
EBITDA is unaudited.
2 Earnings before interest and taxation is defined as profit before interest, taxation and share of profit of equity-accounted investees, net of taxation
A YEAR OF TRANSITION
On
Our ambition:
To double profitability of our core business (Mining and Chemicals) by 2026.
Attain a global market position in Mining of #3 by 2030
Aligned to our strategy, are financial and non-financial targets (KPIs) we expect to achieve by 2026. The execution of the new strategy will be a multi-year journey driven through our Transformation Management Office (TMO) to ensure dedicated focus as well as the tracking of progress. We intend to drive inorganic and organic growth by entering new markets and developing new products to expand our customer and geographic reach.
GROUP RESULTS OVERVIEW
In early in 2023, we unfortunately and regrettably had two work-related fatalities, we wish to convey our sincere condolences to the family, friends and colleagues of the departed. As a Group our primary objective remains Zero Harm.
In terms of our ESG goals, we had a progressive year towards achieving these goals with our scope 1 and 2 emissions, water consumption and water discharge elements decreasing. We are proud that our
The Group achieved strong results for the financial year ended
Profit for the year increased by 23.4% after taking into account a 63.4% increase in net finance costs owing to elevated debt levels related to the turnaround of AECI Schirm, continued higher working capital levels and increasing interest rates. Taxation expense increased by R114 million to R917 million due to increased profitability.
Basic earnings per share increased by 26.7% to 1
R million (unless stated otherwise) 2023 2022 % change Revenue 37 500 35 583 5.4 EBITDA 3 683 3 570 3.2 EBITDA margin (%) 9.8 10.0 (2.0) Depreciation and amortisation 1 053 1 026 2.6 EBIT 2 571 2 047 25.6 EBIT margin (%) 6.9 5.8 19.0 Profit for the year 1 180 956 23.4 Basic earnings per share (EPS) (cents) 1 112 878 26.7 Headline earnings per share (HEPS) (cents) 1 137 1 287 (11.7) Cash generated from operations 4 004 3 840 4.3
The gearing ratio significantly improved to 35% (45% at
Net debt improved to R4 338 million (2022: R5 345 million) driven by stringent net working capital management in the year.
The Group's net debt to EBITDA, as defined in covenant agreements, at
Further reduction in net debt as well as stringent net working capital management remain key focus areas for management and the Board, with operational and strategic free cash flow initiatives being driven to strengthen the balance sheet.
Capital expenditure amounted to R1 303 million (2022: R1 552 million) of which R869 million (2022: R600 million) was maintenance and R434 million (2022: R952 million) growth. The shift in balance towards maintenance capex is in support of our strategy to improve asset utilisation in our existing assets.
Net asset value per share attributable to ordinary shareholders increased by 5% to 11 762 cents from prior year (2022: 11 204 cents ) and 7.2% ahead of the market price of 10 969 cents as at 31 December 2023.
The Board declared a final cash dividend of 119 cents per share (2022: 580 cents per share).
SEGMENTAL REVIEW
AECI Mining's revenue was up 8.4% to R19 621 million (2022: R18 096 million). This was supported by strong volume growth in bulk explosives, initiating systems and electronic detonators on the back of higher demand and good market share gains following new contracts internationally. EBIT of R2 060 million (2022: R1 743 million), a new record achieved was up 18.2% and the EBIT margin strengthened to 10.5% compared to 9.6% in the prior period.
AECI Chemicals' revenue of R8 159 million (2022: R8 529 million) was down 4.3% due to lower demand and pricing pressure. EBIT was R515 million (2022: R562 million) down 8.5% and the EBIT margin was under pressure, at 6.3% (2022: 6.6%). Good margin management in AECI Specialty Chemicals and AECI Beverages contributed positively to performance in a challenging trading environment.
AECI Water's
revenue at R2 009 million (2022: R2 018 million) was in line with the prior year following good sales volumes in the mining and industrial water businesses. The public water sector business, however impacted by low sales volumes and a drop in key raw material prices. EBIT for the segment at R139 million was down 34% (2022: R212 million) following the impact of provisions (mainly bad debt and stock provisions), raised in
2024 OUTLOOK
# AECI Mining to continue its growth trajectory leveraging our skills, expertise and solution focused track-record while we progress our plans to reduce dependency on South African Ammonia supply; # AECI Chemicals performance to continue being tied to the South African macroeconomic environment as well as commodity price shifts, however operational excellence and commercial excellence initiatives to contribute positively to performance; # Progress our strategy execution towards achieving all 2026 targets anchored by our principles of excellence, focus and discipline.
DIVIDEND
Declaration of final ordinary cash dividend No. 180
Notice is hereby given that on Wednesday,
The last day to trade "cum" dividend will be Tuesday,
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 dividend of
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,
Share certificates may not be dematerialised or rematerialised between Wednesday,
By order of the Board
Woodmead, Sandton
AVAILABILITY OF THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED
The Group's audited consolidated financial statements for the year ended
https://senspdf.jse.co.za/documents/2024/jse/isse/AFE/AFSFY2023.pdf
and on the Company's website at:
https://www.ftp.aeciworld-online.com/reports/ar-2023/pdf/AECI2023fullafs.pdf
AUDIT OPINION
In accordance with the auditors' responsibilities in terms of sections 44(2) and 44(3) of the Auditing Profession Act, the auditors reported that, during 2023, a reportable irregularity was identified in terms of the Auditing Profession Act. The matter was reported to the
The contents of this results announcement are the responsibility of the Board of Directors of AECI and is only a summary of the information in the annual financial statements and does not contain full or complete details. This results announcement is itself not audited but extracted from audited results.
Any investment decisions by shareholders and/or investors should be based on a consideration of the annual financial statements as a whole and shareholders and/or investors are encouraged to review the audited annual financial statements, which is available for viewing on the links set out above, as this announcement does not provide all the details.
Directors:
KDK Mokhele (Chairman),
1 German 2 Canadian 3 Australian 4 American
Group Head Investor Relations:
Board sign-off date:
Results released on:
Equity Sponsor and Debt Sponsor
Registered office
First floor,
Share transfer secretaries
And