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A E C I Limited - Condensed Consolidated Unaudited Interim Financial Results To 30 June 2017 And Cash Dividend Declaration

Release Date: 26/07/2017 07:05:00      Code(s): AFE     
AECI Limited
(Incorporated in the Republic of South Africa) 
(Registration number 1924/002590/06)
Tax reference number 9000008608
(?AECI? or ?the Company? or ?the Group?) 
Share code: AFE
ISIN: ZAE000000220

Condensed consolidated unaudited interim financial results and 
cash dividend declaration for the half-year ended 30 June 2017

Highlights
Resilient overall performance in a difficult environment
Profit from operations +19% 
HEPS +32% to 386c
Good cash generation continued
Safety performance: TRIR of 0,43
Interim ordinary cash dividend of 138cps declared
Strategic investment in renewable chemistry

Income statement

                                                2017      2016     2016
                                               First     First
                                         %      half      half     Year
R millions                     Note change unaudited unaudited  audited
Revenue                           2     (7)    8 478     9 068   18 596
Net operating costs                           (7 801)   (8 497) (17 261) 
Profit from operations                  19       677       571    1 335
Share of profit of equity- 
accounted investees, net 
of tax                                            20        28       28
Profit from operations and
equity-accounted investees              16       697       599    1 363
Net finance costs                                (85)     (128)    (215) 
Interest expense                                 (98)     (154)    (270) 
Interest received                                 13        26       55
Profit before tax                                612       471    1 148
Tax expense                                     (188)     (146)    (336) 
Profit for the period                            424       325      812
Profit for the period
attributable to:
? Ordinary shareholders                          407       309      777
? Preference shareholders                          1         2        3
? Non-controlling interest                        16        14       32
                                                 424       325      812
Headline earnings are derived from:
Profit attributable to
ordinary shareholders                            407       309      777
Impairment of goodwill                             ?         ?       28 
(Reversal)/recognition of
impairment of property,
Plant and equipment                                ?        (5)      54
Loss on disposal of equity-
accounted investee                                 1         ?        ? 
(Surplus)/loss on disposal of
property,
Plant and equipment                               (1)       (5)       9
Foreign exchange losses on net 
investments in
Foreign operations                                 ?        14       17
Tax effects of the above
items                                              ?        (3)     (21)
Headline earnings                                407       310      864
Per ordinary share (cents):
Headline earnings                       32       386       293      818
Diluted headline earnings                        377       290      800
Basic earnings                          32       386       292      735
Diluted basic earnings                           377       289      720
Ordinary dividends declared              2       138       135      300
Ordinary dividends paid                          300       260      395

Statement of comprehensive income

                                                 2017      2016    2016
                                                First     First
                                                 half      half    Year
R millions                                  unaudited unaudited audited
Profit for the period                             424       325     812
Other comprehensive income net 
of tax
Items that may be reclassified 
subsequently to profit or loss:
? Foreign currency translation 
  differences                                     (76)     (172)   (376)
? Effective portion of cash flow 
  hedges                                            1         ?      (3) 
Items that may not be reclassified
subsequently to profit or loss:
? Remeasurement of defined-benefit
obligations                                        (6)        ?       ? 
Total comprehensive income for the 
period                                            343       153     433
Total comprehensive income 
attributable to:
? Ordinary shareholders                           329       141     405
? Preference shareholders                           1         2       3
? Non-controlling interest                         13        10      25
                                                  343       153     433

Statement of changes in equity

                                                 2017      2016    2016
                                                First     First
                                                 half      half    Year
R millions                                  unaudited unaudited audited
Total comprehensive income for 
the period                                       343        153     433
Dividends paid                                  (342)      (286)   (435)
Change in ownership percentage                    11          ?       ? 
Share-based payment reserve                      (14)         7      45
Shares repurchased                                 ?        (39)    (39) 
Equity at the beginning of the 
period                                         9 046      9 042   9 042
Equity at the end of the period                9 044      8 877   9 046
Made up as follows:
Ordinary share capital                           110        110     110
Reserves                                       1 197      1 445   1 280
Foreign currency translation reserve           1 016      1 288   1 086
Other reserves                                     ?          ?      (1) 
Share-based payment reserve                      181        157     195
Retained earnings                              7 591      7 203   7 523
Non-controlling interest                         140        113     127
Preference share capital                           6          6       6
                                               9 044      8 877   9 046

Reconciliation of weighted average number of shares

                                                 2017      2016    2016
                                                First     First
                                                 half      half    Year
Millions                                    unaudited unaudited audited
Weighted average number of ordinary        
shares at the beginning                    
Of the period                                   131,9     132,4   132,4
Weighted average number of unlisted        
ordinary shares held by consolidated EST        (10,1)    (10,1)  (10,1)
Weighted average number of contingently    
returnable ordinary shares held by CEDT          (4,4)     (4,4)   (4,4) 
Weighted average number of shares held by  
consolidated subsidiary                         (11,9)    (11,9)  (11,9)
Weighted average number of shares          
repurchased during the period                       ?      (0,2)   (0,3) 
Weighted average number of ordinary shares 
for basic earnings per share                    105,5     105,8   105,7
Dilutive adjustment for potential ordinary 
shares                                            2,6       1,2     2,3
Weighted average number of ordinary shares 
for diluted earnings per share                  108,1     107,0   108,0

Statement of financial position

                                             2017        2016      2016
                                        At 30 Jun   At 30 Jun At 31 Dec
R millions                        Note  unaudited   unaudited   audited
Assets                           
Non-current assets                          7 368       7 918     7 538
Property, plant and equipment               3 925       4 168     3 990
Investment property                           139         139       140
Intangible assets                             200         243       211
Goodwill                                    1 534       1 593     1 541
Pension fund employer surplus                 
accounts                                      497         730       583
Investments in associates                     188         232       194
Investments in joint ventures                 296         298       327
Other investments                              29          28        25
Deferred tax                                  560         487       527
Current assets                              7 754       7 587     8 282
Inventories                                 3 057       3 173     3 174
Accounts receivable                         3 362       3 279     3 342
Other investments                             153          69       190
Loans to joint ventures                         ?          40         ? 
Assets classified as held for    
sale                                 3          ?           ?        60
Tax receivable                                117          85        51
Cash                                        1 065         941     1 465
Total assets                               15 122      15 505    15 820
Equity and liabilities           
Equity                                      9 044       8 877     9 046
Ordinary share capital and       
reserves                                    8 898       8 758     8 913
Non-controlling interest                      140         113       127
Preference share capital                        6           6         6
Non-current liabilities                     2 390       2 819     2 324
Deferred tax                                  287         355       254
Non-current borrowings                      1 601       1 763     1 600
Contingent consideration                       60          74        58
Non-current provisions and       
employee benefits                             442         627       412
Current liabilities                         3 688       3 809     4 450
Accounts payable                            3 096       3 074     4 148
Current borrowings                            471         699       162
Loans from joint ventures                      67          34        75
Tax payable                                    54           2        65
Total equity and liabilities               15 122      15 505    15 820

Statement of cash flows

                                                 2017      2016    2016
                                                First     First
                                                 half      half    Year
R millions                                  unaudited unaudited audited
Cash generated by operations                    1 102     1 122   2 328
Dividends received                                 55        45      46
Interest paid                                     (95)     (150)   (238) 
Interest received                                  13        26      55
Tax paid                                         (269)     (421)   (636) 
Changes in working capital                       (822)     (275)    488
Cash outflows relating to 
defined-benefit costs                             (12)      (13)    (27) 
Cash outflows relating to non-current     
provisions and employee benefits                  (40)      (26)    (76)
Settlement of performance shares                  (43)      (23)    (22)
Cash (utilised in)/available from         
operating activities                             (111)      285   1 918
Dividends paid                                   (342)     (286)   (435) 
Cash flows from operating activities             (453)       (1)  1 483
Cash flows from investing activities             (223)     (270)   (452) 
Acquisition of investments                         (3)      (10)     (5) 
Loans with joint ventures and associates  
(repaid)/raised                                    (8)      (41)     41
Proceeds from sale of business                     30         ?       ? 
Proceeds on disposal of property, plant   
and equipment, investment property        
and intangible assets                              19        17      14
Additions of property, plant and 
equipment, investment property and                   
intangible assets                                (261)     (236)   (502) 
Net cash (utilised)/generated before      
financing activities                             (676)     (271)  1 031
Cash flows from financing activities              323      (857) (1 549) 
Share repurchase                                    ?       (39)    (39) 
Proceeds from disposal of partial 
interest in a subsidiary                           11         ?       ?
Borrowings raised                                 462     1 098   1 110
Borrowings repaid                                (150)   (1 916) (2 620) 
Net decrease in cash                             (353)   (1 128)   (518) 
Cash at the beginning of the period             1 465     2 114   2 114
Translation loss on cash                          (47)      (45)   (131)
Cash at the end of the period                   1 065       941   1 465
                                            
Industry segment analysis
First half unaudited

                                                          2017     2016
R millions                                             External revenue
Explosives                                               3 655    4 105
Specialty chemicals                                      4 682    4 807
Property                                                   141      156
Group services and inter-segment                             ?        ?
                                                         8 478    9 068
Profit from operations                                          
Explosives                                                 262      220
Specialty chemicals                                        518      573
Property                                                    43       44
Group services and inter-segment                          (146)    (266)
                                                           677      571
Operating assets                                                
Explosives                                               4 445    4 779
Specialty chemicals                                      7 284    7 337
Property                                                   321      281
Group services and inter-segment                           167      198
                                                        12 217   12 595
                                                 
R millions                                                2017     2016
Inter-segment revenue                                            
Revenue                                                          
Explosives                                                  19       49
Specialty chemicals                                        227      176
Property                                                    47       39
Group services and inter-segment                          (293)    (264)
                                                             ?        ? 
Depreciation                                            
and amortisation                                                 
Explosives                                                 165      185
Specialty chemicals                                        129      131
Property                                                     4        4
Group services and inter-segment                             4        6
                                                           302      326
Operating liabilities                                            
Explosives                                               1 203    1 165
Specialty chemicals                                      1 764    1 783
Property                                                    63       53
Group services and inter-segment                            66       73
                                                         3 096    3 074
                                                                 
R millions                                                2017     2016
Total segment revenue                                            
Revenue                                                          
Explosives                                               3 674    4 154
Specialty chemicals                                      4 909    4 983
Property                                                   188      195
Group services and inter-segment                          (293)    (264)
                                                         8 478    9 068
Impairment reversal                                                      
Explosives                                                   ?       (5)
Specialty chemicals                                          ?        ? 
Property                                                     ?        ? 
Group services and inter-segment                             ?        ?
                                                             ?       (5)
Capital expenditure                                              
Explosives                                                 149      147
Specialty chemicals                                         81       67
Property                                                    10        3
Group services and inter-segment                            21       19
                                                           261      236

Operating assets comprise property, plant and equipment, investment 
property, intangible assets, goodwill, inventories, accounts receivable 
and assets classified as held for sale. Operating liabilities comprise
accounts payable.

Other salient features

                                                  2017      2016    2016
                                                 First     First
                                                  half      half    Year
R millions                                   unaudited unaudited audited
Capital expenditure                                261       236     502
? expansion                                         90        77     183
? replacement                                      171       159     319
Capital commitments                                393       277     233
? contracted for                                   113        71      62
? not contracted for                               280       206     171
Future rentals on property, plant and       
equipment leased                                   403       271     443
? payable within one year                          105        84     123
? payable thereafter                               298       187     320
Net borrowings 1                                 1 007     1 521     297
Depreciation and amortisation                      302       326     626
Gearing (%) 2                                       11        17       3
Current assets to current liabilities              2,1       2,0     1,9
Net asset value per ordinary share (cents)       8 093     7 966   8 107
ZAR/US$ closing exchange rate (rand)             13,05     14,72   13,73
ZAR/US$ average exchange rate (rand)             12,90     15,43   14,72

1 Current and non-current borrowings less cash.
2 Borrowings less cash, as a percentage of equity.

Notes
(1) Basis of preparation and accounting policies
The condensed consolidated unaudited interim financial results are 
prepared in accordance with International Financial Reporting Standards, 
IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides 
as issued by the Accounting Practices Committee and Financial 
Pronouncements as issued by the Financial Reporting Standards Council, 
and the requirements of the Companies Act of South Africa. The accounting 
policies applied in the preparation of these condensed consolidated 
unaudited interim financial results are in terms of International 
Financial Reporting Standards and are consistent with those applied in 
the previous consolidated annual financial statements.

The preparation of these condensed consolidated unaudited interim 
financial results for the half-year ended 30 June 2017 was supervised by 
the Financial Director, Mr KM Kathan CA(SA) AMP (Harvard). The condensed 
consolidated financial results have not been audited or reviewed by the 
Company?s auditor, KPMG Inc.

(2) Revenue includes foreign and export revenue of R2 893 million
(2016: R3 351 million).

(3) The disposal of Olive Pride, a business that was part of the
Specialty Chemicals segment and which was classified as held for sale at
31 December 2016, was completed on 1 April 2017. The assets disposed of 
were transferred initially to a separate legal entity, Clover Pride 
Proprietary Limited (?Clover Pride?), that was wholly-owned by the Group. 
Subsequent to the transfer of the assets, the Group?s shareholding in 
Clover Pride was reduced through the sale of a 51% stake to Clover S.A. 
Proprietary Limited for a total consideration of R30 million.

The Group?s remaining 49% stake in Clover Pride is treated as an equity- 
accounted investee in terms of IAS 28 Investments in Associates and Joint 
Ventures, and it is part of the Specialty Chemicals segment.

The sale agreement provided for continued trading by the business 
throughout the disposal process, resulting in movements in its held-for-
sale asset values between the previous reporting date and the date of 
disposal.

The carrying amount of total assets sold was:

                                             2016        2017      2017
R millions                              At 31 Dec   Movements  At 1 Apr
Goodwill                                       27           1        28
Property, plant and equipment                   1           ?         1
Intangible assets                              21           ?        21
Inventory                                      11          (3)        8
Total assets disposed of                       60          (2)       58
Exchanged for:
? trade loan with associate                                           4
? investment in associate                                            24
Proceeds on disposal                                                 30
Surplus/(shortfall) on disposal                                       ?

(4) Provisions and contingent liabilities
The investigation process undertaken by the Competition Commission of 
South Africa (?the Commission?) in 2014, into collusion by Akulu Marchon 
(?Akulu?) and a competitor, has been concluded. Both parties concluded 
separate settlement agreements with the Commission. Akulu will pay a 
penalty of R13 905 600 on or about 14 August 2017 and a provision was 
raised in respect of this amount. Akulu has also agreed to and 
implemented behavioural remedies which will be applied across the Group.

The Group is involved in various legal proceedings and is in consultation 
with its legal counsel, assessing the outcome of these proceedings, on an 
ongoing basis. As proceedings progress, the Group?s management makes 
provision in respect of legal proceedings where appropriate. Litigations, 
current or pending, are not likely to have a material adverse effect on 
the Group.

(5) The Group entered into various sale and purchase transactions with 
related parties in the Group in the ordinary course of business on terms 
that are no more and no less favourable than transactions with unrelated 
external parties. The nature of these transactions were consistent with 
those previously reported. All transactions and balances with these 
related parties have been eliminated appropriately in the consolidated 
results.

(6) The Group measures forward exchange contracts at fair value using 
inputs as described in level 2 of the fair value hierarchy. The fair 
values for forward exchange contracts are based on quotes from brokers. 
Similar contracts are traded in an active market and the quotes reflect 
the actual transactions on similar instruments. The carrying values of 
all other financial assets and liabilities approximate their fair values 
based on the nature or maturity period of the financial instrument. There 
were no transfers between levels 1, 2 or 3 of the fair value hierarchy 
during the half-year ended 30 June 2017.

(7) The condensed consolidated unaudited interim financial results do 
not include all of the disclosures required for full financial statements 
and should be read in conjunction with the consolidated financial 
statements for the year ended 31 December 2016.

Commentary
Financial performance
AECI delivered a resilient overall performance in an environment that was 
extremely difficult, particularly in South Africa. Activity in the local 
manufacturing sector slowed further and the strength of the rand exchange 
rate against major currencies offset moderate increases in commodity 
chemical prices. This had a negative impact on the Group?s overall revenue. 
In the agricultural sector, more normalised weather patterns in Southern 
Africa?s summer rainfall regions enabled a recovery. In the Western Cape, 
however, the effects of the persistent drought remain of grave concern. 
Conditions in the local and international mining sector improved, with some 
commodity price increases providing the stimulus for higher mining output 
year-on-year.

HEPS grew by 32% to 386 cents (2016: 293 cents) and profit from operations 
increased by 19% to R677 million (2016: R571 million). Revenue declined by 
7% to R8 478 million (2016: R9 068 million). 34% of total revenue was 
generated outside of South Africa.

In the prior corresponding period results were negatively affected by the 
settlement cost of AECI?s post-retirement medical aid liability. The effects 
of these adjustments are summarised in the table below:

                        June 2017          June 2016         % change
                Profit from         Profit from        Profit from
                 operations   HEPS   operations  HEPS   operations     HEPS
                        (Rm)  (cps)         (Rm) (cps)              
Reported                677    386          571   293           19       32
PRMA settlement                                                   
cost                     11      7          136    93               
Underlying                                                        
performance             688    393          707   386           (3)       2

The Board has declared an interim cash dividend of 138 cents per ordinary 
share, 2% higher than the 135 cents declared for the six months ended 
30 June 2016.

Safety
The aspiration remains zero harm to employees and contractors. The 12-month 
rolling Total Recordable Injury Rate (?TRIR?) was 0,43, an encouraging 
improvement on the 0,45 at the end of 2016. The TRIR measures the number 
of incidents per 200 000 hours worked.

Segmental performance
Explosives
AEL Mining Services (?AEL?) achieved an excellent improvement of 19% in 
profit from operations, which increased to R262 million (2016: R220 million). 
This was in spite of lower ammonia prices and a stronger ZAR/US$ exchange 
rate year-on-year, which affected revenue and the trading margin. The 
segment?s revenue was 11,6% lower at R3 674 million (2016: R4 154 million). 
Of this, 60% was generated in hard currency outside of South Africa. The 
trading margin was 7,1% (2016: 5,3%), reflecting the benefits of good cost 
control and a beneficial product and customer mix. Overall explosives 
volumes were flat.

In South Africa, explosives volumes were 1% higher thanks to market share 
gains in the iron ore and uranium mining sectors as well as improved 
activity in coal mining. Volumes of initiating systems were 3% higher 
owing to opportunistic sales by AEL after a competitor declared 
force majeure.

Volumes in the rest of Africa were down 2,4%, mainly as a consequence of 
business having been lost in Egypt at the end of 2016. Less buoyant gold 
mining activity in West Africa, owing to the effects of heavy rainfall 
and lower mining production efficiencies, also had an impact. Volumes 
remained robust in Central Africa and, in Southern Africa there was a 
pleasing performance from the business in Botswana. AEL was awarded 
five new contracts in East and West Africa. The deployment of 
assets to service these has commenced.

Overall volumes in Asia Pacific declined by 1,5%, primarily because of 
extreme weather events in Australia early in the year. Both the Indonesian 
and the Australian businesses remained profitable. One new contract was 
secured in Indonesia and one in Australia. Both contracts will commence 
towards the end of the year.

Capital expenditure in the segment was well controlled at R149 million. 
R118 million of this related to replacement capital expenditure, mainly 
for the planned statutory shutdown of No. 11 Nitric Acid Plant that is 
underway. The balance of the expenditure was mostly in support of new 
business gained.

Specialty Chemicals
Revenue declined by 1,5% to R4 909 million (2016: R4 983 million). Profit 
from operations was R518 million (2016: R573 million) and the trading 
margin was 10,5% (2016: 11,5%). Overall volumes declined by 2,4%.

In addition to the further slowdown in South Africa?s manufacturing 
sector and the effects of a stronger local currency, the segment?s 
results were also impacted by:

* lower exports of mining chemicals by Senmin, due to delayed orders 
  from a key customer. These orders will be dispatched in the second 
  half of the year;
* the closure by Huntsman Tioxide of its manufacturing operations at 
  Umbogintwini, in November 2016. This company was a major user of 
  Chemical Initiatives? sulphuric acid. Although a portion of the lost 
  volumes was placed in the market, the impact on the business was 
  nonetheless significant;
* lower sales of agrochemicals in the Western Cape by Nulandis, because 
  of drought conditions.

ImproChem, AECI?s water treatment business, delivered a solid performance 
thanks to higher demand after a normalised rainfall season in South 
Africa?s inland provinces as well as strong sales to the public water 
sector in several African countries.

There were good results from Experse, which supplies emulsifiers to the 
explosives manufacturing industry and specialty coatings to the fertilizer 
industry. Export growth in both divisions was particularly pleasing.

At Lake Foods, there was a promising improvement in performance owing to 
the strict focus on cost control and better efficiencies.

Capital expenditure was R81 million. Of this, R49 million was for 
expansion - including a portion of the projected total R90 million 
investment in the 4 000 tonnes a year capacity expansion at Senmin?s 
xanthates plant. Xanthates are used in the extraction of gold, platinum 
and copper. The project is expected to come on line in the second half 
of 2018.

Acquisition opportunities for the segment continue to be pursued and 
a number of processes in this regard are underway.

Property
Revenue was R188 million (2016: R195 million) and profit from operations 
was R43 million, slightly lower than 2016?s R44 million. Key in this regard 
were the effects of the Huntsman Tioxide closure on the services business 
at Umbogintwini. Good occupancy rates at this site and at Modderfontein 
were maintained.

Cash utilisation
Cash available from operating activities reflected an outflow of R111 million. 
Historically, the Group?s first-half working capital performance is weaker 
than that in the second half-year. In the current period this trend was 
exacerbated by a lower level of buying by Group businesses, resulting in 
lower trade payables at the end of the reporting period. Furthermore, 
customers delayed their remittances at the end of June. This increased the 
trade accounts receivable amount. The management of accounts receivable 
remained challenging as large customers continued to seek extended payment 
terms. The net working capital to revenue ratio increased to 18,5% 
(2016: 17,9%).

The management of fixed capital expenditure remained disciplined, with the 
Group again targeting spend at least in line with the depreciation and 
amortisation charge. Total capital expenditure was R261 million 
(2016: R236 million). Of this amount, R91 million was invested in expansion 
projects.

Cash interest cover was at 14,6 times (2016: 8,4 times), with the improvement 
due mainly to lower levels of debt in the period. Accordingly, the net interest 
cost decreased to R85 million (2016: R128 million).

Future segmental reporting
In 2014, AECI revised its strategy and developed five key growth pillars, 
namely Mining, Water, Agriculture, Food, and a Chemicals Cluster. These 
pillars, have since been the focus of AECI?s integrated reporting. Progress 
has been made in managing Group businesses in terms of these pillars and, 
as indicated in the announcement of the Company?s financial results for 2016 
on 28 February, the process of altering internal reporting to reflect this is 
underway. Management reporting is being structured by pillar and the same 
restructuring will apply to reporting of the financial statements for the 
full 2017 financial year.

Competition Commission
In December 2014, the Competition Commission of South Africa (?the Commission?) 
initiated an investigation relating to collusion between Akulu Marchon and a 
competitor. AECI cooperated fully with the Commission throughout the 
investigation, which has been concluded. In terms of the settlement reached 
with the Commission, the Group will pay a penalty of R13,9 million, in 
August, in full and final settlement of the matter. Furthermore, awareness 
of the importance of good governance and business practices is being reinforced 
Group-wide.

Strategic investment
In 2016, the Group initiated projects aimed at identifying potential new 
products and markets that could contribute to the acceleration of itsgrowth. 
In line with this, a strategic investment of US$5 million (R65 million) 
was made in Origin Materials (?Origin?) after the reporting date. Origin 
is a privately-owned company in the US with new technology in renewable 
chemicals.

The investment positions AECI to take advantage of the global shift towards 
renewable products and to benefit from opportunities in the renewable and 
bio-based chemicals industries. Scale-up of Origin?s technology to a pioneer 
production plant is scheduled for completion at the end of 2018.

Outlook
The Group?s pillar strategy will be leveraged to expand its geographic 
footprint and market reach through organic growth and acquisitions.

Global mining is gaining momentum and this is positive for the Explosives 
segment, which has an extensive footprint and a broad spectrum of customers 
in this sector. Furthermore, market share gains and new contracts secured, 
are expected to benefit performance.

In South Africa, no significant acceleration of growth in the manufacturing 
sector is anticipated. Growth in the agrochemicals business will depend on 
rainfall patterns. AECI?s mining chemicals business has a good pipeline of 
export orders, however, and there are also opportunities for 
growth in the water treatment sector. 

These factors, together with sustained focus on managing working capital 
and capital expenditure, as well as cost containment, should support an 
improved performance in the second half of the year.

Any forecast information included in this announcement has not been 
reviewed and reported on by the Company?s external auditors.

Khotso Mokhele                       Mark Dytor
Chairman                             Chief Executive

Woodmead, Sandton
26 July 2017

Directors: K D K Mokhele (Chairman), G W Dempster, M A Dytor 
(Chief Executive), Z Fuphe, G Gomwe*, K M Kathan (Executive), 
R J M Kgosana, L L Mda, A J Morgan, R Ramashia.
Group Company Secretary: E N Rapoo
*Zimbabwean

Notice to shareholders
Declaration of interim ordinary cash dividend no. 167
Notice is hereby given that on Tuesday, 25 July 2017, the Directors of 
AECI declared a gross interim cash dividend of 138 cents per share, in 
respect of the six month period ended 30 June 2017. The dividend is payable 
on Monday, 4 September 2017 to holders of ordinary shares recorded in the 
register of the Company at the close of business on the record date, being 
Friday, 1 September 2017.

The last day to trade ?cum? dividend will be Tuesday, 29 August 2017 and 
shares will commence trading ?ex? dividend as from the commencement of 
business on Wednesday, 30 August 2017.

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 110,40000 cents per share 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, 
29 August 2017.

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, 29 August 2017.

Share certificates may not be dematerialised or rematerialised from 
Wednesday, 30 August 2017 to Friday, 1 September 2017, both days 
inclusive.

By order of the Board

EN Rapoo
Group Company Secretary
Woodmead, Sandton
26 July 2017

Transfer Secretaries
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2196

Computershare Investor Services PLC PO Box 82
The Pavilions Bridgwater Road Bristol BS 99 7NH England

Registered Office
First floor, AECI Place
24 The Woodlands Woodlands Drive Woodmead
Sandton

Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
1 Merchant Place, cnr Fredman Drive and Rivonia Road, Sandton, 2196
Date: 26/07/2017 07:05:00 Supplied by www.sharenet.co.za                     
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