AECI has mainly shrugged off drought and SA’s disastrous mining impasse to deliver a “more than pleasing” result for the year ended December 2017.

The mining and agricultural chemicals group reported a 17% jump in headline earnings per share, its highest ever. This was helped by a strong fourth quarter. Profit from operations leapt 18% to R1.58bn as earnings before interest, tax, depreciation and amortisation grew 11% to R2.2bn. Profit for the year soared 21% to R983m from R812m in 2016.

This comes from recovery in global resources, the company’s greater diversification and disciplined cost control. But drought in the Western Cape is still hitting exports of stone fruits and vegetables that are grown using AECI agrichemical products.

Aslam Dalvi, associate portfolio manager at Kagiso Asset Management, said the results were good, particularly in the second half of the year.

“While mining solutions was the stand-out performer, the company also delivered credible performances across the other chemical divisions. This … was delivered notwithstanding the negative impact of the drought on the agriculture division, a stronger exchange rate towards the latter part of 2017 and weakness in the South African manufacturing sector.”

The share price fell 1.77% near the market close on Tuesday. Dalvi said that going forward, AECI should benefit from a more favourable operating environment, particularly in mining.

“Improving business confidence is another positive indicator for the company, to the extent that this confidence leads to investment across South African manufacturing,” he said.

However, the manufacturing business was affected by poor economic growth in SA, which led to the domestic manufacturing sector contracting further. The group supplies chemical raw materials and related services to a broad spectrum of industrial customers.

AECI CEO Mark Dytor referred to “the winds of change” on Tuesday.

He said SA was in a more positive place than it was in 2017, but the country “must resolve the Mining Charter”. The group was busy integrating Schirm, a German and US-based maker of agrochemicals and fine chemicals.

It had recently bought Schirm for €110.5m from JSE-listed transport and logistics group Imperial Holdings as part of AECI’s international expansion strategy.

Meanwhile, the R2.3bn acquisition of Cape Town-based Much Asphalt in late October 2017 — southern Africa’s largest supplier of hot and cold asphalt products — was still in front of competition authorities and was expected to be finalised by May or June 2018, Dytor said.

AECI declared a total dividend of 478c for the 2017 financial year, up 10% on the prior period’s 435c. For the 2017 year, the group changed its segmental reporting structure from explosives and specialty chemicals to five strategic pillars: mining solutions; water and process; plant and animal health; food and beverage; and chemicals.