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Summarised audited financial results, Board change and cash dividend for the year ended 31 December 2021
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
Date of release on SENS: 2 March 2022
Date: 02-03-2022 07:05:00
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