AECI Limited Year-end Results & Dividend Declaration
February 24 2021 - 2:00AM
UK Regulatory
TIDM87FZ
AECI LIMITED
(Incorporated in the Republic of South Africa)
(Registration No. 1924/002590/06)
Tax reference No. 9000008608
Share code: AFE ISIN: ZAE000000220
Hybrid code: AFEP ISIN: ZAE000000238
Bond company code: AECI
Bond code: AECI03 ISIN: ZAG000155227
Bond code: AECI04 ISIN: ZAG000155235
LEI: 3789008641F1D3D90E85
(AECI or the Company or the Group)
Summarised audited consolidated financial results and final cash dividend
declaration for the year ended 31 December 2020
- CASH GENERATED FROM OPERATING ACTIVITIES R3 132m
- GEARING 22% FY19: 36%
- FINAL CASH DIVID OF 470c DECLARED
- REVENUE -3% to R24 111m Underlying* +2% to R25 202m Foreign & export
revenue: 44% of total revenue
- EBITDA -15% to R2 943m Underlying* +4% to R3 368m
- PROFIT FROM OPERATIONS -55% to R917m Underlying* +3% to R2 232m
- SAFETY PERFORMANCE TRIR of 0,42
*Excl. impairments, net profit from sale of businesses and estimated COVID-19
impact.
AECI's results for 2020 demonstrated the benefits of the Company's strategy to
diversify geographically and in terms of the markets served. We now operate in
22 countries and regions on six continents and provide products and services to
customers across a broad range of sectors. This diversification makes us more
resilient and agile in responding to changing market conditions. Without these
advantages, some unprecedented challenges in 2020 would have had a
significantly more severe impact on our performance.
Further diversification and consolidation of our strategic footprint will
remain a focus going forward as we deliver value to all stakeholders in line
with our commitment being purpose-led in who we are and in everything we do.
Purpose is at the core of our "One AECI, for a better world" revised brand
promise. The global pandemic has brought humanity together in a desire to build
back better and, through our products and service, we embrace the opportunity
to make a meaningful contribution into the future.
COVID-19
The COVID-19 pandemic and its ongoing effects have dominated global
conversation and every aspect of human life for the past year. Regrettably, the
AECI family has not been left unscathed. Four of our colleagues in South Africa
have succumbed to COVID-related illnesses to date and many others have
experienced tragedy in their own families and among their friends. The Board
and management extend their sincere condolences to the families of our deceased
employees and to all our employees who have suffered similar bereavement.
The Board and management also take this opportunity to pay tribute to the way
all employees have responded to the unprecedented challenges. Their diligence
and determination have been exemplary. Equally, we express our gratitude to all
AECI's stakeholders for their ongoing and unwavering support.
The Group leadership's focus since March last year has been on navigating the
business through the effects of the pandemic. To this end, a COVID-19 Task Team
was established with the strategic intent of minimising impact on our people,
on our operations and safeguarding the supply of products and services to
customers globally.
A comprehensive AECI COVID-19 Response Plan was developed in March 2020 and has
been updated regularly to reflect the changing circumstances and requirements
through the pandemic. It is currently in its 12th Revision. Employees' health
and working arrangements continue to be tracked and monitored daily in line
with this plan, which is available at https://static1.squarespace.com/static/
5dc3e3a1ddb32f 457c64c6af/t/6024f2bf87d7df2a609f7980/1613034179567/
12-august-2020-aeci-response-plan-for-covid-19-rev12.pdf.
More than 90% of all employees are now performing their duties at their place
of work. A total of 590 employees have tested positive for COVID-19 to date,
with 574 of them having recovered fully. Currently, 16 positive cases are being
tracked actively and two employees are receiving treatment in hospital.
In addition to implementation of the Response Plan, operational business
continuity management plans have been adapted and applied in line with the
Company's overall risk management framework. These measures have enabled
continuity in operations and in meeting all our customers' needs globally.
The net asset value per share attributable to ordinary shareholders decreased
by 2% (from 9 925 cents in 2019 to 9 679 cents) and basic earnings per share
decreased by 90% (from 1 223 cents in 2019 to 127 cents in 2020).
Safety
The TRIR* was at 0,42 at year-end (2019: 0,38). This was a disappointing
performance. COVID-19 continues to present emotional and logistical challenges
for our employees, both in their homes and in the workplace. These challenges
undoubtedly have an impact. We recognise this and a new programme focused on
holistic wellness and safety has been launched Group-wide in response. Some key
elements of the programme cover people engagement, behaviour-based safety, risk
management and process safety.
*The TRIR measures the number of recordable incidents per 200 000 hours worked.
Financial performance
Revenue of R24 111 million was 3% lower (2019: R24 799 million), with declines
recorded primarily in the AECI Mining and AECI Chemicals segments. Of the total
revenue, 44% was generated outside of South Africa and mostly in US dollars and
Euros. The weaker average rand exchange rate against these major currencies
assisted in limiting the revenue decline.
EBITDA of R2 943 million was 15% lower than 2019's R3 473 million. Profit from
operations was 55% lower at R917 million (2019: R2 031 million) and was
negatively impacted by impairments of certain property, plant and equipment and
goodwill in the amount of R890 million. R821 million of this amount related to
the impairment of goodwill on the acquisition of AECI Much Asphalt. There was a
positive impact from the disposals of three business units. The most
significant of these was the sale of the Group's pulp and paper chemicals unit.
Proceeds of R208 million were received, with profit of R108 million. The
benefits of the strategic realignment projects undertaken in the prior year in
AECI Mining Explosives and AECI Water were in line with expectations overall.
The structural realignment of AECI Chemicals was undertaken in the first half
of the year. Associated costs were offset by the project's benefits in the
second six months and annualised savings of R100 million are still anticipated.
Reported headline earnings per share (HEPS) of 880 cents was 23% lower
year-on-year (2019: 1 150 cents). Headline earnings decreased to R928 million
from 2019's R1 213 million.
Financial impact of COVID-19
Each Group operating entity estimated the impact of the COVID-19 pandemic on
revenue, volumes and costs as accurately as it was possible to do so from March
2020 onwards. These calculations were based on the following:
- Revenue
o Loss of revenue based on historical trends, revenue levels preceding 1
April 2020 and open orders cancelled as a direct result of the pandemic
o Additional revenue generated directly related to the pandemic
- Cost of sales
o Costs not incurred as a direct result of revenue assumptions above
o Overhead under-recoveries as a direct result of the loss of revenue
o Costs incurred as a direct result of additional revenue generated
o Calculated as volumes not sold at current market prices or estimates of
costs based on an estimated gross profit percentage
- Operating costs
o Additional costs incurred as a direct result of the pandemic
o Costs not incurred as a direct result of the pandemic
- Tax on above
o Tax at the Group's effective tax rate, excluding impairments
The estimated negative impact on the Group's financial performance was as
follows:
- revenue R1 091 million
- profit from R527 million
operations
- HEPS 341 cents
The AECI Mining and AECI Chemicals segments were the most seriously affected.
These losses were partly offset by good sales of sanitiser by AECI Schirm in
Germany and AECI Specialty Chemicals in South Africa.
Having considered that the Company managed its cash resources exceptionally
well in the period and remains in a solid financial position, notwithstanding
the uncertainty and negative effects resulting from the COVID-19 pandemic, the
Board decided to declare a final ordinary cash dividend of 470 cents (final
ordinary dividend of 414 cents for the year ended 31 December 2019).
The total ordinary dividend for 2020 was 570 cents, unchanged from the total
dividend for 2019.
Directorate and Group Company Secretary
Changes that were announced in the prior year and took effect in the current
year, as well as those
announced in the current year, were as follows:
- Allen Morgan resigned as a Non-executive Director on 26 May 2020 after 10
years on the Board, and
Jonathan Molapo resigned on 24 November 2020 owing to the demands of his
executive commitments outside the Group. The Board reiterates its appreciation
for their services.
- Steve Dawson and Walter Dissinger joined the Board on 1 January 2020 as
Non-executive Directors and
Marna Roets was appointed in the same capacity with effect from 1 June
2020.
- Nomini Rapoo resigned from her position as Group Company Secretary, with
effect from 31 December 2020, after almost a decade in that role. We thank her
for her contribution. Wynand Strydom was appointed to act in this position with
effect from 1 January 2021.
Dividend
Declaration of final ordinary cash dividend No. 174
Notice is hereby given that on Tuesday, 23 February 2021 the Directors of AECI
declared a gross final cash dividend of 470 cents per share in respect of the
financial year ended 31 December 2020. The dividend is payable on Monday, 12
April 2021 to holders of ordinary shares recorded in the register of the
Company at the close of business on the record date, being Friday, 9 April
2021.
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 376 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, 6 April 2021.
The issued share capital of the Company at the declaration date is 109 944 384
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, 6 April 2021.
The salient dates for the dividend will be as follows:
Last day to trade cum Tuesday, 6 April 2021
dividend
Ex dividend trade Wednesday, 7 April 2021
Record date Friday, 9 April 2021
Payment date Monday, 12 April 2021
Share certificates may not be dematerialised or rematerialised between
Wednesday, 7 April 2021 to Friday, 9 April 2021, both days inclusive.
By order of the Board
WJ Strydom
Group Company Secretary
Woodmead, Sandton
24 February 2021
The full long-form announcement including the unmodified audit opinion of the
external auditor, Deloitte & Touche, on the summarised consolidated financial
statements, and the basis for its unmodified opinion has been released on SENS
and is available at:
https://senspdf.jse.co.za/documents/2021/JSE/ISSE/AFE/fy20.pdf
https://investor.aeciworld.com/s/2020-results-announcement.pdf
The annual financial statements including the audit opinion of the external
auditor, Deloitte & Touche, which sets out a key audit matter and the basis for
its unmodified opinion is available at:
https://investor.aeciworld.com/s/full-afs-2020.pdf
The contents of this short-form announcement are the responsibility of the
Board of Directors of AECI Ltd.
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
noteholders should be based on consideration of the full announcement as a
whole. Investors, shareholders and noteholders 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
noteholders at no charge, can also be requested by contacting the Group Company
Secretary: WJ Strydom, Private Bag X21, Gallo Manor, 2052,
wynand.strydom@aeciworld.com or groupcommunications@aeciworld.com.
REGISTERED OFFICE
First floor, AECI Place, 24 The Woodlands, Woodlands Drive, Woodmead, Sandton
SHARE TRANSFER SECRETARIES
Computershare Investor Services Proprietary Limited, Rosebank Towers, 15
Biermann Avenue, Rosebank, Johannesburg, 2196
Computershare Investor Services plc, PO Box 82, The Pavilions, Bridgwater Road,
Bristol BS99 7NH, England
EQUITY AND DEBT SPONSOR
Rand Merchant Bank (a division of FirstRand Bank Limited), 1 Merchant Place,
cnr Fredman Drive and Rivonia Road, Sandton, 2196
DIRECTORS
KDK Mokhele (Chairman), SA Dawson*, FFT De Buck, WH Dissinger**, MA Dytor
(Chief Executive), G Gomwe?, KM Kathan (Executive), R Ramashia, AM Roets, PG
Sibiya
*Australian **German ?Zimbabwean
AECIWORLD.COM
END
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