AECI Limited has announced its audited consolidated financial results for the year ending 31 December 2023. The company reported a 5.4% increase in revenue, reaching R37.5 billion. Despite this growth, the company’s headline earnings per share (HEPS) saw a decline of 11.7% to 1,137 cents, while earnings per share (EPS) rose by 26.7% to 1,112 cents. A notable decrease was observed in the final cash dividend, down by 79% to 119 cents per share.
Company Strategy and Outlook:
In light of its upcoming 100-year anniversary in March 2024, AECI is embarking on a strategic transition aimed at doubling the profitability of its core businesses, Mining and Chemicals, by 2026. The company also seeks to secure a prominent global position in the mining sector by 2030. With a focus on safety and sustainability, AECI aims to achieve its financial and non-financial targets through a combination of organic and inorganic growth strategies.
Segmental Performance:
AECI Mining witnessed a commendable 8.4% increase in revenue, reaching R19.6 billion, driven by volume growth in key product lines. The segment achieved a record EBIT of R2.06 billion, marking an 18.2% increase compared to the previous year.
On the other hand, AECI Chemicals experienced a 4.3% decline in revenue due to lower demand and pricing pressures, resulting in an 8.5% decrease in EBIT to R515 million.
AECI Agri Health demonstrated revenue growth of 8%, yet incurred an EBIT loss of R192 million, primarily attributable to performance issues within AECI Schirm.
Despite stable revenue in AECI Water, EBIT declined by 34% to R139 million, impacted by provisions raised in December 2023.
Dividend Declaration:
Despite the mixed financial results, AECI declared a final cash dividend of 119 cents per share for the year ending 31 December 2023. The dividend will be payable on 8 April 2024 to shareholders recorded in the company’s register as of 5 April 2024.
Shareholders subject to South African dividend withholding tax will receive a net dividend of 95.20 cents per share after a 20% withholding tax deduction.
Outlook and Forward Plans:
Looking ahead to 2024, AECI Mining is poised to maintain its growth trajectory while reducing dependency on South African ammonia supply. AECI Chemicals’ performance will remain tied to macroeconomic factors and commodity price shifts, with operational and commercial excellence initiatives expected to drive improvements. The company is steadfast in its commitment to executing its strategic objectives, anchored by principles of excellence, focus, and discipline.
Conclusion:
Despite facing various challenges, AECI Limited remains focused on its long-term strategic goals and delivering value to shareholders. The declaration of a final dividend underscores the company’s confidence in its ability to navigate through market dynamics and capitalize on growth opportunities in the years to come.
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