AECI Limited
(Incorporated in the Republic of South
Africa)
(Registration No. 1924/002590/06)
Share code:
AFE
ISIN: ZAE000000220
Hybrid code: AFEP
ISIN: ZAE000000238
Bond company code: AECI
LEI: 3789008641F1D3D90E85
(AECI or the Company or the Group)
Summarised audited consolidated financial results, Board change
and final cash dividend declaration for the year ended 31 December 2021
Revenue
+8% to R26 053m
Foreign & export revenue: 41% of total revenue
HEPS
+27% to 1 116c
EBITDA
+5% to R3 091m
Cash generated from operating activities
R1 467m
Profit from operations
+124% to R2 052m
Gearing
24%
(1H21: 27%; FY20: 22%)
Final cash dividend of
505 cents per share declared
685 cents per share total dividend
for ’21
Net debt:EBITDA
<1
Best-ever safety performance
TRIR of 0,23
(’20: 0,42)
In 2021, AECI successfully navigated through three waves of
COVID-19, overcoming significant global supply chain challenges and
higher commodity prices to ensure the reliable supply of our
diverse range of quality products and services to customers in
various markets around the world. At the same time, we recorded our
best-ever safety performance and made significant progress towards
the achievement of our sustainability targets.
Amid high input costs, the impact of supply chain disruptions on
working capital and a stronger average rand affecting hard currency
earnings, we reported robust financial results, demonstrating the
benefits of our diversification, agility and strategic pillar
structure.
The Board of Directors formally reviewed and approved our
strategy in October, clearly defining the Company’s growth plans,
targets and objectives to ensure we deliver on our purpose of “One
AECI, for a Better World”.
COVID-19
Across the world, COVID-19 continued to impact health and
wellbeing, lives and livelihoods. Many of our people experienced
bereavement among their families and friends. Tragically 12 of our
colleagues succumbed to COVID-19-related illnesses. All were in
South Africa and all passed away
during the first three waves of the pandemic. The Board and
management extend their sincere condolences to their families and
to all employees who have lost loved ones. The fourth wave of
COVID-19 is receding and thankfully no further deaths have
occurred.
People everywhere became more accustomed to navigating the
crisis, with changes in consumer patterns impacting supply chain
dynamics. Supply chains and shipments slowed, causing shortages of
certain raw and packaging materials, thus disrupting production.
Although not unscathed, companies with local sources of supply and
local production facilities were better able to meet their
customers’ requirements. For many companies the need to hold higher
levels of more expensive inventory pushed up working capital. This
was indeed the case for AECI.
Our COVID-19 Task Team continued to meet — virtually — every
week, implementing our Response Plan. The plan focuses on
mitigating the impact of the pandemic on our people, our operations
and the supply of products and services to customers, as well as on
the roll-out of vaccinations. Together with the Response Plan, the
Group also continued to apply its business continuity plans at all
operations globally.
Almost all AECI’s people are now back at their places of work.
The Board and management would like to thank all employees for
their diligence and determination in response to the challenges of
life under COVID-19. We are also grateful to our many other
stakeholders for their support.
Safety
One of our three strategic platforms is “Zero Harm and
Sustainability”. The year 2021 was the most successful in AECI’s
history in terms of performance against all the occupational health
and safety indicators that we measure.
The Total Recordable Incident Rate (TRIR) improved to 0,23
(2020: 0,42). The TRIR measures the number of recordable incidents
per 200 000 hours worked. While COVID-19 continued to present
numerous challenges to our employees, we learnt how to deal with
the pandemic in the workplace and our people renewed their
commitment to achieving Zero Harm by re-committing to our Safety
Improvement Plan. A key part of this plan is the standardisation
across the business of items such as safety, health and environment
risk descriptors, processes and systems.
Financial performance
AECI’s revenue increased by 8% to R26 053 million (2020: R24 111
million). AECI Mining and AECI Chemicals were the business pillars
most affected by COVID-19 in 2020. The businesses in both segments
recovered well in 2021, with AECI Mining benefiting as global
mining activity returned to more normalised levels. AECI Chemicals
further benefited from the strategic realignment process completed
in 2020 which delivered in line with expectations. Also assisting
was a level of overall improvement in South Africa’s manufacturing,
infrastructure and general industrial sectors, albeit from a low
base.
Of the total Group revenue, 41% (2020: 44%) was generated
outside of South Africa, with the
stronger average rand exchange rate against these major currencies
having an impact.
EBITDA of R3 091 million grew by 5% from 2020’s R2 943 million.
Profit from operations recovered strongly to R2 052 million, 124%
up from 2020’s R917 million. There were no impairments in the
current year, compared to 2020 which had been negatively affected
by impairments of certain property, plant and equipment and
goodwill in the amount of R890 million, mostly relating to the
goodwill on the acquisition of AECI Much Asphalt.
Reported headline earnings per share (HEPS) of 1 116 cents was 27% higher year-on-year (2020:
880 cents). Headline earnings
increased to R1 178 million from 2020’s R928 million.
The Company remains in a solid financial position and has repaid
R1 877 million in term debt, while maintaining a robust net gearing
ratio of 24% (2020: 22%). There has been an investment in inventory
to ensure supply is available to meet increasing demand in an
environment where supply chain timing has extended and disruptions
have become frequent.
The Board, considering the solid performance and stable
financial position, declared a final ordinary cash dividend of
505 cents (final ordinary dividend of
470 cents for the year ended
31 December 2020), a 7% increase.
The total ordinary dividend for 2021 was 685 cents, up from the 570
cents total dividend for 2020, a 20% increase.
The net asset value per share attributable to ordinary
shareholders increased by 7% (from 9 679
cents in 2020 to 10 384 cents)
and basic earnings per share increased by more than 100% (from
127 cents in 2020 to 1 125 cents in 2021).
Directorate and Group Company
Secretary
Changes that were announced and took effect in the year, as well
as those that take effect in 2022, were as follows:
- Patricia Mishic O’Brien joined the Board on 1 July 2021 as an Independent Non-executive
Director. She was appointed to further strengthen the Board’s
capacity in terms of knowledge and experience of the chemicals
industry at an international level. Ms O’Brien joined the Social
and Ethics Committee and the Integrated Chemicals Financial Review
Committee on 1 August 2021.
- Cheryl Singh was appointed as
Group Company Secretary with effect from 1
September 2021, filling a vacancy.
- Aarti Takoordeen was appointed as Chief Financial Officer and
Executive Director, effective 20 May
2022. She succeeds Mark
Kathan, who has served as CFO from 2008. Mr Kathan assumes
leadership of AECI Mining, a key role in the Group. He succeeds the
previous incumbent who retired from that position on 31 December 2021. Mr Kathan remains on the
Group’s Board of Directors.
After a tenure of 12 years, on 1 March
2022, Rams Ramashia advised the Board of his intention to
step down as a Non-executive Director of the Company at the next
AGM, on 31 May 2022. During his
tenure as Non-executive Director, Rams served as a member of the
Remuneration and Nomination Committees. He also chaired the Social
and Ethics Committee prior to becoming Chairman of the Risk
Committee. The Board thanks him for his valuable contribution.
Dividend
Declaration of final ordinary cash
dividend No. 176
Notice is hereby given that on Tuesday, 1
March 2022 the Directors of AECI declared a gross final cash
dividend of 505 cents per share in
respect of the financial year ended 31
December 2021. The dividend is payable on Monday,
11 April 2022 to holders of ordinary
shares recorded in the register of the Company at the close of
business on the record date, being Friday, 8
April 2022.
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
404 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, 5 April 2022.
The issued share capital of the Company at the declaration date
is 105 517 780 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, 5 April
2022.
The salient dates for the dividend will be as follows:
Last day to trade cum dividend |
Tuesday, 5 April 2022 |
Ex dividend trade |
Wednesday, 6 April 2022 |
Record date |
Friday, 8 April 2022 |
Payment date |
Monday, 11 April 2022 |
Share certificates may not be dematerialised or rematerialised
between Wednesday, 6 April 2022 and
Friday, 8 April 2022, both days
inclusive.
By order of the Board
Cheryl Singh
Group Company Secretary
Woodmead, Sandton
1 March 2022
The full 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/2022/JSE/ISSE/AFE/fy21.pdf
https://investor.aeciworld.com/s/2021-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/AECI2021fullafs.pdf
The contents of this short-form announcement are the
responsibility of the Board of Directors of AECI. 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. These copies can also be
requested by contacting the Group Company Secretary: C Singh,
Private Bag X21, Gallo Manor, 2052,
cheryl.singh@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, 2196
Computershare Investor Services plc, PO Box 82, The Pavilions,
Bridgwater Road, Bristol BS 99 7NH, England
Sponsor 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), PM Mishic O’Brien?‡, R Ramashia, AM Roets, PG Sibiya *
Australian ** German † Zimbabwean ‡ American
aeciworld.com