AECI has more acquisition plans in the pipeline

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Johannesburg - AECI planned to buy assets inside and outside South Africa this year, the explosives and chemicals group said yesterday as it posted a 57 percent rise in full-year headline earnings.

“Acquisitions in South Africa, the rest of Africa and in selected other regions in AECI’s markets of interest will continue to be pursued in the coming year,” chief executive Mark Dytor said.

Last month the group announced that wholly owned subsidiary ImproChem would acquire Clariant Southern Africa’s water treatment business in Africa and its South African assets for a total cash consideration of R409 million.

The acquisition included a 50 percent shareholding in Blendtech, Clariant’s empowerment partner in South Africa.

The acquisition is in line with the group’s strategy to grow its footprint in the water solutions sector, and is subject to approvals by the relevant competition authorities.

In addition AECI aims to benefit from growth outside South Africa from both greenfield and brownfield expansion projects in the copper, gold and iron ore mining sectors, and the Black Bear Resources Indonesia (BBRI) investment.

The group acquired a 42 percent stake in Indonesian chemical firm BBRI for $23m (worth about R205m at the time) two years ago to tap into the south-east Asian mining market.

Dytor said there was also scope for growth in South African open-cast mining, particularly in iron ore and coal, and warned of pressure in the gold and platinum sectors in the year ahead because of weaker commodity prices.

Strikes in the platinum mining industry had already had an impact on AECI’s results in the early part of this year, the company said.

Headline earnings increased to R885m in the year to December from R562m as the rand depreciated 17 percent.

Headline earnings a share rose to R7.91 from R5.03 in 2012 while earnings a share rose to R8.45 from R5.20 in 2012.

Headline earnings are a measurement of a company’s earnings based solely on operational and capital investment activities.

The group declared a final cash dividend of R2.10 a share compared with R1.85 in 2012, bringing the total cash dividend for the year to R3.15 a share, a 20 percent increase on 2012.

The improved performance was a result of growth in mining activity in the rest of Africa from existing and new mining projects, and better financials in the explosives and property business.

The group’s AEL Mining Services achieved a 17 percent increase in revenue to R7.4 billion from R6.33bn in 2012.

AECI shares lost 0.86 percent on the day to close at R128.88 on the JSE, backing off initial gains to as high as R132.80. - Business Report


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