AEEI maintains strong balance sheet through interim period
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CAPE TOWN - DIVERSIFIED investment group African Equity Empowerment Investments (AEEI) achieved stable results through the six months to February 28, underpinned by resilient balance sheet strength.
AEEI’s revenue, headline earnings and net assets decreased slightly by 9 percent despite the tough economic environment and the Covid-19 pandemic directly overlapping the reporting period,
Strong cash balances resulted in the declaration of a dividend of 30 cents a share, well up from 10c the prior year.
CE Valentine Dzvova said: “While businesses are firmly hitting back at the impact of the coronavirus, operating any business in this climate is not without considerable challenges. AEEI’s response necessitated a focus on protecting its core investments through strategic cost efficiencies, while also investing for future growth, and optimally managing the working capital, something I believe we have successfully achieved.”
A streamlining of AEEI’s corporate division was based on risk management and had demonstrated the strategy to minimise corporate costs and increase shareholder value.
The corporate division reported increased revenue and a decline in overhead costs. The division includes stakes in BT Communication Services SA and Sygnia, which continued to deliver growth in value, while paying regular annual dividends.
CFO Jowayne van Wyk said: “Exceptional cost and margin management minimised a more acute negative set of interim results and softened the impact that the pandemic has had on our balance sheet. While our challenge continues, the management team is already working hard to grow the group’s operating results to pre-pandemic levels.”
AEEI’s fishing and brands subsidiary lifted revenue by 31 percent for its squid, lobster, and pelagic catches, while profit before tax was up by 62 percent. Prospects for the division were looking promising as demand for the well-known brand and resources remained strong.
A decrease in revenue and pre-tax was experienced by AEEI’s technology subsidiary, driven largely by the declining overall trading environment, non-renewal of contracts, and a decrease in interest income.
The acquisition of Kathea Communications,
effective March 1, was expected to mitigate against a reduction in revenue over the next six months.
There had been a slight decrease in the import and distribution of AEEI’s cosmetics brands as well as the manufacturing, sales and marketing of the group’s natural products, while demand from the agriculture sector had increased for this division’s Agri Biostimulants.
Due to the ongoing fallout of the pandemic, AEEI was focusing on sustaining its core
make high-quality acquisitions, and the policy was to thoroughly study potential target companies so as not to put the balance sheet at risk, with due diligence leading to a slower acquisition rate.
“The pandemic has brought many changes, but on a more human level, the way in which we work and engage with our colleagues and employees at AEEI has improved our productivity and social structure and assisted us to work through these challenges as a cohesive unit,” Dzvova said.