Unrest casts shadow on AECI earnings rise
The group said all its businesses remained operational and it was working to safeguard the supply chain
Diversified explosives and chemicals group AECI, which has experienced a significant rebound in earnings in the first half of 2021, has cautioned that it cannot yet quantify the effect that civil unrest in the country would have on its business.
The group, which has been listed on the JSE since 1966, said on Friday its half-year headline earnings per share for the interim period and earnings per share would be between 515c and 540c, representing an increase of between 115% and 125% in headline earnings per share, compared to the first half of 2020, and an increase of between 110% and 120% in earnings per share.
AECI, whose products and services are provided to customers in the mining, water treatment, plant and animal health, food and beverage, infrastructure and general industrial sectors, said the strong interim results were owed to a less severe effect of Covid-19 on its customers in the first half of 2021, compared with the first six months of 2020.
The group said earnings were further boosted by the fact that costs incurred to restructure businesses in AECI Chemicals in 2020 did not recur, plus the benefits of restructuring were realised in line with expectations. The chemicals business supplies raw materials and related services to a spectrum of customers in the food and beverage, manufacturing, infrastructure and general industrial sectors.
Earnings per share has also been negatively affected in prior corresponding period by the impairment of goodwill, property, plant and equipment as a result of the group exiting non-performing businesses.
The group, which has presence in six continents, said the violence, looting and general lawlessness experienced in SA this week was a “matter of extreme concern”, noting some of AECI’s employees and their families in KwaZulu-Natal and parts of Gauteng, had been directly affected by the unrest and that the company would endeavour to assist them wherever possible.
“All our businesses remain operational at this time and we are collaborating closely with our customers and suppliers to safeguard the supply chain,” AECI said in a statement.
“At this time, the company is unable to quantify the real or potential impact of the prevailing volatility on its businesses. Information in this regard will be shared, as appropriate, when it is possible to do so.”
The company’s interim results will be released on about July 28.