AECI Limited Trading Statement

 
TIDM87FZ 
 
AECI LIMITED 
Incorporated in the Republic of South Africa 
(Registration number: 1924/002590/06) 
Share code: AFE ISIN: ZAE000000220 
Hybrid code: AFEP ISIN: ZAE000000238 
Bond company code: AECI 
LEI: 3789008641F1D3D90E85 
(AECI or the Company) 
 
TRADING STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020 
 
In compliance with the JSE Limited Listings Requirements, shareholders and 
noteholders are advised that for the financial year ended 31 December 2020 (the 
period), AECI's headline earnings per share (HEPS) is expected to be between 
920 cents and 863 cents, that is between 20% and 25% lower than the 1 150 cents 
for the financial year ended 31 December 2019 (the prior corresponding period). 
Earnings per share (EPS) is expected to be between 147 cents and 86 cents, that 
is between 88% and 93% lower than the 1 223 cents in the prior corresponding 
period. 
 
The significant contributors in this regard during the period were as follows: 
 
  * The COVID-19 pandemic had a severe impact on trading in many of the sectors 
    in which AECI's customers operate, resulting in lower revenue and 
    profitability particularly in the first half-year.  Although more 
    normalised trading was evident in most of the affected sectors in the 
    second six months as pandemic-related restrictions were eased, a recovery 
    to pre-pandemic levels had not been achieved by year-end.  It is estimated 
    by management that the negative effect of COVID-19 on HEPS and EPS in the 
    period was approximately 340 cents.   Historical information on the Group's 
    financial performance and market trends in sectors where the Group operates 
    were used to calculate this estimate. 
  * AECI Much Asphalt operates in the road infrastructure sector, which was 
    among the most severely impacted by COVID-19 restrictions in the first half 
    of 2020. 
 
The South African government is committed to investment in infrastructure 
projects, including road infrastructure.  Owing to fiscal priorities as a 
result of COVID-19, however, in the Company's view a level of uncertainty 
remains as to the pace at which it will be possible to execute these projects. 
Following an assessment by management in the context of this uncertainty, R821 
million (or 778 cents in EPS terms) of the R1 530 million goodwill recognised 
at acquisition was impaired. 
 
An unwavering focus on the diligent management of cash through the COVID-19 
pandemic enabled a considerable improvement in cash generation compared to the 
prior corresponding period.  The benefits of this were reflected in the 
Company's net gearing ratio which is expected to be between 20% and 25% 
compared to 36% as at 31 December 2019. 
 
AECI is currently finalising its results for the period and it is expected that 
these will be released on the Stock Exchange News Service on or about 
Wednesday, 24 February 2021. 
 
The financial information on which this trading statement is based has not been 
reviewed, reported on or audited by the Company's external auditor.  The 
information provided does not contain, and should not be construed as 
containing, any forward-looking statements or projections of any nature for the 
financial year ended 31 December 2020. 
 
Woodmead, Sandton 
 
17 February 2021 
 
Sponsor and Debt Sponsor: Rand Merchant Bank (A division of FirstRand Bank 
Limited) 
 
 
 
END
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