Wrap Text
Extract of unaudited interim results & cash dividend declaration for the period ended 30 June 2019 & board changes
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
(AECI or the Company or the Group)
Extract of unaudited interim results and cash dividend
declaration for the period ended 30 June 2019 and
Board changes
Revenue +14% to R11 972m
Profit from operations -9% to R826m
Underlying +9% to R992m
Interim ordinary cash dividend 156cps declared
Achieved Level 2 B-BBEE Contributor status
EBITDA +7% to R1 346m
Underlying +11% to R1 391m
HEPS -20% to 365c
Underlying +7% to 492c
Safety performance improved TRIR of 0,51
Excluding acquisitions, TRIR of 0,27
GCR rating upgraded to A+ with stable outlook
Financial performance
AECI delivered a creditable performance, achieving
revenue growth of 14% to R11 972 million for the half-
year ended 30 June 2019 (2018: R10 473 million). This
was underpinned by contributions for the full period
from the acquisitions finalised in 2018, namely Schirm
(Plant and Animal Health) and Much Asphalt (Chemicals).
Pleasing revenue improvements were achieved in all of
the Group's strategic pillars. The Mining Solutions
segment benefited from higher sales volumes on the
continent outside of South Africa as well as the
weaker ZAR/US$ exchange rate. Foreign and export
revenue of R4 971 million accounted for 42% of
total revenue (2018: R4 139 million, 40% of total
revenue).
Profit from operations was R826 million, 9% lower
than 2018's R911 million. Headline earnings per share
(HEPS) and earnings per share (EPS) were 365 cents
and 367 cents, respectively, 20% lower than the HEPS
and EPS of 458 cents in the first half of last year.
Profitability was negatively impacted by a number
of factors. Key among these were:
* The costs associated with strategic realignment
projects initiated in the fourth quarter of 2018
by AEL Intelligent Blasting (AEL) in the Mining
Solutions segment and by ImproChem, which
constitutes the Water and Process segment. Both
these projects were essentially completed by
30 June 2019, at an aggregate non-recurring cost
of R156 million for the period (100 cents HEPS
effect). The total cost of these projects was
R204 million.
* Change in significant accounting policies:
IFRS 16 Leases, adopted by the Group on
1 January 2019. The Group adopted this standard
using the modified retrospective approach, under
which the cumulative effect of initial
application was recognised in retained earnings
as at 1 January 2019 (12 cents HEPS effect).
* The initial accounting for the acquisitions had
not been provisionally determined at 30 June 2018
since the necessary information to perform market
valuations and other calculations for the purchase
price allocation (PPA) was not yet available.
Non-cash amortisation of identifiable assets in the
amount of R23 million, in aggregate, was recognised
through the PPA for both Schirm and Much Asphalt in
the first half of 2019 (15 cents HEPS effect).
* Power supply constraints in South Africa in the
first quarter. These curtailed some of AECI's own
operations and had more adverse consequences for
customers in some sectors serviced by the Group.
The Board has declared an interim cash dividend of
156 cents per ordinary share, an increase of 5% from
2018's 149 cents per share. A South African dividend
withholding tax of 20% will be applicable to the
dividend, resulting in a net dividend of 124,8 cents
per share payable to those shareholders who are not
eligible for exemption or reduction.
The net asset value per share attributable to ordinary
shareholders increased by 3,2% from 8 714 cents at
30 June 2018 to 8 994 cents at 30 June 2019.
Safety
The Group's Total Recordable Incident Rate (TRIR), which
measures the number of incidents per 200 000 hours worked,
improved to 0,51 from 0,58 in December 2018. Although
progress made by Schirm and Much Asphalt was encouraging,
more radical measures have been introduced to accelerate
further improvement in these two acquisitions. Excluding
the acquisitions, the Group's TRIR was 0,27 (0,33 in
December 2018).
Directorate
As announced during the period, Graham Dempster will leave
the AECI Board on 29 September 2019. The Board thanks him
for his contribution during his three-year tenure as a
Non-executive Director of the Company. Also announced in
the period was the appointment of Fikile De Buck as a Non-
executive Director of AECI, with effect from 1 June 2019.
The Board welcomes her and looks forward to her input.
Godfrey Gomwe has served as Chairman of the Audit Committee
(the Committee) since 2017. He will relinquish this role on
1 October 2019 but will continue to serve as a Committee
member. Philisiwe Sibiya, currently a member of the
Committee, will assume its chairmanship responsibilities on
that same date.
Dividend
Declaration of interim ordinary cash dividend no. 171
Notice is hereby given that on Tuesday, 23 July 2019, the
Directors of AECI declared a gross interim cash dividend of
156 cents per share, in respect of the six-month period ended
30 June 2019. The dividend is payable on Monday, 2 September
2019 to holders of ordinary shares recorded in the register
of the Company at the close of business on the record date,
being Friday, 30 August 2019.
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 124,8 cents per share 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,
27 August 2019.
The issued share capital at the declaration date is 121 829 083
listed ordinary shares, 10 117 951 unlisted redeemable convertible
B 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, 27 August 2019.
The salient dates for the dividend will be as follows:
Last day to trade cum dividend Tuesday, 27 August 2019
Ex dividend trade Wednesday, 28 August 2019
Record date Friday, 30 August 2019
Payment date Monday, 2 September 2019
Share certificates may not be dematerialised or rematerialised from
Wednesday, 28 August 2019 to Friday, 30 August 2019, both days
inclusive.
By order of the Board
EN Rapoo
Group Company Secretary
Woodmead, Sandton
24 July 2019
The full long form announcement is available at
https://senspdf.jse.co.za/documents/2019/JSE/ISSE/AFE/1H19.pdf
The contents of this short form announcement are the responsibility
of the Board of Directors of the Company (the Board). Shareholders
and bondholders are advised that this short form announcement represents
a summary of the information contained in the full announcement, also
published on AECI's website
https://www.aeciworld.com/pdf/investors/interim-results/2019/interim-results-2019.pdf
Any investment decisions by investors and/or shareholders and/or bondholders
should be based on a consideration of the full announcement as a whole and
investors, shareholders and bondholders are encouraged to review the full
announcement, which is available as set out above. Copies of the full
announcement may be requested by emailing nomini.rapoo@aeciworld.com or
writing to the Group Company Secretary, AECI, Private Bag X21, Gallo
Manor, 2052.
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, Johannesburg, 2196
Computershare Investor Services plc, PO Box 82, The Pavilions,
Bridgwater Road, Bristol BS99 7NH, England
Sponsor
Rand Merchant Bank (a division of FirstRand Bank Limited), 1 Merchant
Place, cnr Fredman Drive and Rivonia Road, Sandton, 2196
Directors
KDK Mokhele (Chairman), FFT De Buck, GW Dempster, MA Dytor (Chief
Executive), Z Fuphe, G Gomwe*, KM Kathan (Executive), J Molapo, AJ Morgan,
R Ramashia, PG Sibiya. * Zimbabwean
AECIWORLD.COM
Date: 24/07/2019 07:05:00
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