Diversified chemicals company AECI delivered a strong performance for the six months to June 30.

The trading environment began to normalise during the second half of 2020 as the world recovered from the initial waves of Covid-19 infections. The improvement continued into this year, but AECI CEO Mark Dytor noted on July 28 that the recovery “has not occurred at the same rate internationally and across all sectors of activity” for the company.

In an interview with Engineering News & Mining Weekly, Dytor highlighted the AECI group’s resilience during the pandemic, stating that, while the impact of the pandemic this year “has been uplifted”, the company is still feeling the impact of the pandemic on its operations.

The global and South African economies having not yet fully recovered from the pandemic, constraints in shipping (both in imports and exports) still being experienced and an inability to access containers and raw materials were some of the challenges that AECI’s supply chain experienced.

In spite of this, Dytor said the health and safety of people “remain paramount” during this period.

Meanwhile, whereas the US and Chinese economies were on rapid growth trajectories, others were lagging. That included South Africa’s and Europe’s.

The net asset value per share attributable to ordinary shareholders decreased by 9% but basic earnings per share increased by 117%. Headline earnings per share (HEPS), meanwhile, were 529c, 120% higher than the 240c reported for the comparable period in 2020.

In terms of AECI’s overall financial performance, all of the group’s businesses were operational in the half-year, unlike in 2020, when restrictions associated with mitigating the spread and effects of the coronavirus required some of its businesses and those of its customers to scale back or suspend their activities.

In the prior corresponding period, management estimated that the impact of the Covid-19 pandemic on revenue and profit from operations was R1-billion and R454-million respectively, with the negative effect on HEPS having been estimated at 294c.

While there was a strong year-on-year recovery, some markets had yet to return to prepandemic levels, Dytor lamented during a virtual presentation of the company’s results on July 29.

Revenue increased by 5% to R11.8-billion, though growth was restricted by some considerations. This also affected the improvement in earnings before interest, taxes, depreciation and amortisation (Ebitda) and profit from operations.

Considerations included that not all mining customers on the African continent had resumed their operations, as some remained on care and maintenance, while four of AECI’s large customers in the oil refining and industrial sectors had not resume their operations in the period.

Last year’s sanitiser order at AECI Schirm did not recur, and the stronger average rand exchange rate against the dollar and the euro were also taken into account.

Ebitda was more than R1.4-billion, 23% higher than 2020’s R1.1-billion. Profit from operations increased by 70% to R948-million.

Headline earnings increased to R559-million from R254-million in the prior corresponding period.

Given the progress made by the company in its recovery from the effects of Covid-19, the board declared an interim ordinary cash dividend of 180c, about 80% higher than the 100c declared for the half-year ended June 30, 2020.

Commenting on the recent civil unrest in KwaZulu-Natal and Gauteng, Dytor said that AECI was “quite fortunate”, as its assets were left “unscathed” and in “good working condition”.

AECI, however, had to close operations in KwaZulu-Natal for the week during the civil unrest to ensure the health and safety of its employees in the province.

Dytor bemoaned the temporary closure of the N3 as a result of the civil unrest, as the route is a “major gateway” between the ports in KwaZulu-Natal and Gauteng.