AECI increases revenue, EBITDA and HEPS. Prioritises the turnaround of Schirm Germany
- Safety performance: TRIR of 0.15 (0.23 as at 31 December 2021)
- Revenue up 37% to R35 583 million
- EBITDA2 up 16% to R3 570 million
- EBIT1 flat at R2 047 million
- HEPS up 15% to 1 287 cents
- EPS down 22% to 878 cents
- Growth capex of R952 million (61% of total R1 552 million capex)
- Working capital at 19% of revenue from 18% in 2021
- Gearing at 45% (24% in 2021)
- Final cash dividend up 15% to 580 cps
Earnings before interest and taxation is defined as profit before interest, taxation and share of profit of equity-accounted investees, net of taxation
Earnings before interest, taxation, depreciation and amortisation calculated as profit from operations and equity-accounted investees plus depreciation, amortisation and impairments.
EBITDA is unaudited.
The main highlight in the year was the excellent safety performance, reflected in a Total Recordable Incident Rate (TRIR) of 0.15. This is the lowest TRIR since AECI commenced measuring this metric. The Group is also on track to reach all its published 2025 sustainability targets.
The upward strong performance was made possible by delivery in line with a solid growth strategy across the Group’s businesses.
AECI Mining achieved a record performance by growing revenue by 51%, attributed to strong market share gains, export growth in mining chemicals and increased chemical commodity prices. 67% of the businesses’ total revenue was generated outside of South Africa.
AECI Chemicals, AECI Water and AECI Agri Health grew revenue by 32%, 31% and 17% respectively. Similarly, the increased revenue performance was directly attributed to delivery against a more focused strategy and improved sales volumes.
Proactive actions taken by the Group to ensure security of supply to the market, following supply chain challenges, and high raw material prices during the period resulted in elevated levels of working capital. Inventory increased to R6 780 million (2021: R4880 million), matched by an increase of R1 985 million (2021: R446 million) in short-term debt.
The AECI Schirm Germany business recorded an operating loss of R228 million which triggered a right-of-use asset and PPE impairment of R445 million. The Board-approved comprehensive turnaround project is expected to deliver commercial recovery including clearly defined milestones as well as details associated with the required once off costs. Notably, high priority actions have been taken and we expect once-off costs to impact 2023 earnings. The Board expects positive earnings contribution within 20 to 36 months.
AECI Much Asphalt delivered a markedly better performance, increasing revenue by 37% and EBIT by 21% from 2021’s result.
The initial vesting period of the AECI Employees Share Trust (EST) was extended by 12 months by the Board to 9 February 2023. An additional dividend of 50.5 cents per share was paid to beneficiaries on 28 September 2022. As at the extended vesting date, the share scheme was not value accretive to beneficiaries and will therefore be wound up. The Group remains committed to driving the Group’s B-BBEE ownership goals.
Following the appointment of the new Group Chief Executive, Holger Riemensperger who will join AECI on 1 May 2023 the Group’s leadership remains highly energised and focused on optimising existing operations in 2023 and beyond.