AECI Limited - Summarised Results to 31 Dec 2019 & Div Dec
London, February 25
(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")
Summarised consolidated financial results, cash dividend declaration, and Board changes for the year to 31 December 2019
- Revenue up 6% to R24 799m
- Profit from operations up 2% to R2 031m
- Solid HEPS growth up 10% to 1 150c
- Receipt of proceeds from sale of shareholding in Crest Chemicals; and land sale
- EBITDA up 26% to R3 326m
- EPS up 30% to 1 223c
- Realignment projects delivered
- Excellent improvement in safety performance: TRIR of 0,38
- Final ordinary cash dividend: 414cps declared, up 13% (2018: 366cps)
- Total FY19 dividend: 570cps declared, up 11% (FY18: 515cps)
AECI achieved another pleasing result in the year ended 31 December 2019. Revenue increased by 6,4% to R24 799 million (2018: R23 314 million), with all operating segments achieving growth. The inclusion of results from Schirm and Much Asphalt for the full 12-month period accounted for 2,5% of the revenue increase.
Of the Group's total revenue, 40% or R10 033 million, was generated outside South Africa (2018: R9 207 million). In addition to the contribution from Schirm, the majority of the foreign revenue amount was generated by Mining Solutions' operations in the rest of Africa and denominated mainly in US dollar.
Businesses in South Africa continued to be challenged by external factors such as depressed GDP growth, power supply constraints, high unemployment rates and hence subdued consumer demand.
EBITDA of R3 326 million was 26% more than 2018's R2 631 million. Two key contributors to this significant increase were the profit realised on the sale of Crest Chemicals and the effects of IFRS 16.
Profit from operations was 2% higher at R2 031 million (2018: R1 999 million). The year-on-year improvement was curtailed by a goodwill impairment of R147 million in the Food and Beverage segment.
Higher profitability was recorded in Mining Solutions, Water and Process and Plant and Animal Health.
The business realignment projects initiated in 2018 in the Explosives business and in Water and Process delivered to expectations. The performance in Food and Beverage and Chemicals disappointed.
Earnings per share ("EPS") was 1 223 cents, reflecting 30% growth from the 938 cents reported in the 2018 financial year. The increase in EPS was underpinned by the following:
- receipt of the proceeds from the sale of the Group's 50% shareholding in Crest Chemicals Proprietary Limited to its joint venture partner, Brenntag (Holding) BV; and
- receipt of the proceeds from the sale of land, in Modderfontein, in the second half of the year.
Neither of these transactions were included in the calculation for headline earnings per share ("HEPS").
HEPS of 1 150 cents was 10% higher year-on-year (2018: 1 045 cents). Headline earnings increased to R1 213 million from 2018's R1 103 million.
The Board has declared a final gross cash dividend of 414 cents per ordinary share, 13% more than the 366 cents paid for 2018. It brings the total dividend for the 2019 financial year to 570 cents, an 11% year-on-year increase (2018: 515 cents). A South African dividend withholding tax of 20% will be applicable to the dividend, resulting in a net dividend of 331,2 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 8,6% (from 9 135 cents in 2018 to 9 925 cents in 2019) and basic earnings per share increased by 30,4% (from 938 cents in 2018 to 1 223 cents in 2019).
DIRECTORATE CHANGES AND CHANGES IN SIGNIFICANT RESPONSIBILITIES
During the year, Graham Dempster and Zellah Fuphe resigned from their positions as Non-executive Directors of AECI. The Board thanks both of them for their highly valuable contributions to the affairs of the Board and the Company during their respective tenures.
Allen Morgan, who joined the Board in 2010, has indicated his intention to retire at the next Annual General Meeting of the Company's shareholders, on 26 May 2020. At that time he will relinquish all his other Board responsibilities. This includes chairmanship of the Risk Committee and the Integrated Chemicals Financial Review and Risk Committee, as well as membership of the Audit, Investment and Social and Ethics Committees. AECI thanks Mr Morgan most sincerely, in advance, for his valued input to the Company's affairs during his nine-year tenure.
On 1 June 2019 we welcomed Fikile De Buck as a Non-executive Director. She was subsequently appointed to the Audit Committee and to the Social and Ethics Committee. From 26 May 2020 she will succeed Rams Ramashia as Chairman of this Committee.
As announced in December 2019, Steve Dawson and Walter Dissinger were also appointed as Non-executive Directors with effect from 1 January 2020. We welcome them and look forward to the benefit of their international experience in businesses aligned with AECI's strategic growth pillars.
DECLARATION OF FINAL ORDINARY CASH DIVIDEND NO. 172
NOTICE IS HEREBY GIVEN that, on Monday, 24 February 2020, the Directors of AECI declared a gross final cash dividend of 414 cents per share, in respect of the financial year ended 31 December 2019.
The dividend is payable on Monday, 6 April 2020 to holders of ordinary shares recorded in the register of the Company at the close of business on the record date, being Friday, 3 April 2020.
The last day to trade "cum" dividend will be Tuesday, 31 March 2020 and shares will commence trading "ex" dividend as from the commencement of business on Wednesday, 1 April 2020.
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 331,2 cents per share payable 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, 31 March 2020.
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, 31 March 2020.
Share certificates may not be dematerialised or rematerialised between Wednesday, 1 April 2020 to Friday, 3 April 2020, both days inclusive.
By order of the Board
Group Company Secretary
25 February 2020
The full long-form announcement including the audit opinion of the external auditor, Deloitte and Touche, on the summarised consolidated financial statements, and the basis for its unmodified opinion is available at:
The annual financial statements including the audit opinion of the external auditor, Deloitte and Touche, which sets out a key audit matter and the basis for its unmodified opinion is available at:
The contents of this short-form announcement are the responsibility of the Board of Directors of AECI Limited. This short-form announcement is only a summary of the information in the full announcement and does not contain full or complete details. This announcement is itself not audited but extracted from audited results. Any investment decisions made by investors and/or shareholders and/or bondholders should be based on consideration of the full announcement as a whole. Investors, shareholders and bondholders are encouraged to review the full announcement which is available on SENS and on AECI's website. The full announcement is also available for inspection at the registered office of AECI.
Copies of the full announcement are available to investors, shareholders and bondholders at no charge, during normal business hours from Tuesday, 25 February 2020.
24 The Woodlands
SHARE TRANSFER SECRETARIES
Computershare Investor Services Proprietary Limited
15 Biermann Avenue
Computershare Investor Services plc
PO Box 82
Bristol BS99 7NH
Rand Merchant Bank (a division of FirstRand Bank Limited)
1 Merchant Place
Cnr Fredman Drive and Rivonia Road
KDK Mokhele (Chairman)
SA Dawson *
FFT De Buck
WH Dissinger **
MA Dytor (Chief Executive)
G Gomwe ***
KM Kathan (Executive)