AECI headline earnings decline after customer trading affected by Covid pandemic
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CAPE TOWN - CHEMICAL group AECI said yesterday headline earnings per share were expected to be between 920 to 863 cents for the year to December 31, which was 20 to 25 percent lower than 1 150c reported for the 2019 financial year.
Earnings a share was expected to be between 147c to 86c, which would be 88 to 93 percent lower than 1 223c in the prior corresponding period, a trading statement said.
A big contributor to this decline was the Covid-19 pandemic that impacted trading in many of the sectors in which AECI’s customers operate, resulting in lower revenue and profitability, particularly in the first half.
“Although more normalised trading was evident in the second six months as pandemic restrictions eased, a recovery to prepandemic levels was not achieved by year-end,” the group said.
Management estimated the negative effect of Covid-19 on headline and earnings per share was equivalent to about 340c a share. AECI Much Asphalt, which operates in the road infrastructure sector, was among the most severely impacted of AECI’s businesses by Covid-19 restrictions in the first half of 2020.
Following an assessment by management in the context of uncertainty about future road contracts being undertaken by the government, R821 million of R1.53 billion goodwill recognised at acquisition was impaired.
The annual results are expected to be released on February 24.