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Mining, water businesses drive AECI’s record interim performance

AECI Group CE and executive director Holger Riemensperger discusses AECI’s mining and water businesses and how they drove the company’s record interim performance. Camerawork: Shadwyn Dickinson. Editing: Shadwyn Dickinson

26th July 2023

By: Cameron Mackay

Creamer Media Senior Online Writer

     

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Diversified chemicals group AECI delivered record growth in revenue; earnings before interest, taxes, depreciation and amortisation (Ebitda); and headline earnings per share (HEPS) for the six months ended June 30.

The group’s revenue increased by 19% year-on-year to R18.4-billion, while Ebitda increased by 18% year-on-year to R1.83-billion.

HEPS increased by 5% year-on-year to 603c and earnings a share by 5% to 600c.

AECI declared a dividend of 100c a share.

“I am pleased with the resilience of the business, which has seen it deliver solid results in the interim period. Performance has been driven by strong volume recovery and market expansion at AECI Mining, as well as AECI Water.

“Positive growth was also experienced at AECI Agri Health, where a robust first-quarter performance drove performance,” AECI Group CE and executive director Holger Riemensperger said on July 26.

He noted that the group’s strong performance was achieved against the backdrop of a challenging trading environment.

Overall, the operating business segments of the group delivered good growth, but the chemicals business was impacted by the South African macro-environment. 

Riemensperger told Engineering News & Mining Weekly that the group’s mining business – the largest of the group’s business segments – was also its best-performing business.

“In mining particularly, the growth we are generating comes from outside of South Africa. Our most important and fastest-growing businesses are Australia and Australasia, as well as Central Africa.

“Increasing our share of outside South Africa business in our portfolio . . . is one of our important strategic goals,” he added.

He further pointed out that the AECI Water business continued to gain new customers, many of which were in the mining sector.

Owing to this, AECI Mining and AECI Water work closely together to provide a more holistic service to mines, he emphasised.

Riemensperger noted that AECI’s industrial business in the water segment was also growing.

“We have seen lower growth or no growth in the public water business, but we see that picking up now. This is also related to weather conditions. It's a question of rainfall, as more rainfall means that more water treatment is required, so that is the driver. This is not market-related, but rather a weather condition.”

While the group is making progress in improving its balance sheet strength and the turnaround of the underperforming AECI Schirm Germany business, its focus is on ensuring the delivery of value across the group.

To this end, a strategy review is under way.

Riemensperger explained to Engineering News & Mining Weekly that the strategy it had in place was developed in 2018, prior to significant global events, such as the Covid-19 pandemic, the global energy crisis and the start of the energy transition, as well as geopolitical events such as Russia’s invasion of Ukraine.

All of these factors needed to be taken into account for a strategy review, he stressed.

“We are still in the relatively earlier stages. What we will do, however, is really look into the portfolio of the businesses we are in. We will look more into what is core and where can we grow, and where our businesses maybe have less opportunities to grow.

“These elements we will have at the forefront, but operational excellence will also play an important role.

“The group is also reviewing options with respect to its broad-based black economic economic empowerment ownership goals,” he said. 

Riemensperger told Engineering News & Mining Weekly that AECI implemented its employees share trust (EST) in 2012, which vested without value and was wound up.

The beneficiaries did benefit from receiving net dividends of R35-million over the prescribed period.

“In the spirit of that EST, and also to maintain goodwill, we decided to make an ex-gratia payment totalling R106-million to the beneficiaries.

“What we are doing at the moment is working on a new EST scheme as one of the options which we want to secure so that it cannot vest without value again,” he pointed out.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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