AECI reports loss after land sales skews comparison
Company says the global resources sector showed some recovery in 2016, but the longer-term sustainability of improved conditions in the sector remains uncertain
Chemicals and explosives manufacturer AECI on Tuesday reported a 9% drop in headline earnings per share (HEPS) to R8.81 in the year to end-December, affected partly by one-off items. The company sold parcels of land in Somerset West in the year-earlier period, which added R2.95 to HEPS. Group revenue was up just 1% to R18.59bn while profit from operations declined 22% to R1.33bn. AECI operates out of two main divisions: speciality chemicals; and explosives. Profit from operations in the speciality segment was up 8.3% to R1.21m as revenue rose 9.1% to R10.78bn. The increase in revenue in this speciality division was driven by higher prices as a result of the weaker average rand exchange rate to the dollar and the benefits of the acquisitions finalised in 2015. Profit from operations in the explosives division rose 7.4% to R449m, which was off revenue of R7.97bn. "Although the global resources sector showed some recovery and overall commodity prices increased in the latter part of 201...
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