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A E C I LIMITED - Trading statement: Half-year ended 30 June 2019

Release Date: 17/07/2019 07:05
Code(s): AFE AFEP AECI03 AECI04 AECI01 AECI02     PDF:  
Wrap Text
Trading statement: Half-year ended 30 June 2019

AECI LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1924/002590/06)
Share code: AFE ISIN: ZAE000000220
Hybrid code: AFEP ISIN: ZAE000000238
Bond company code: AECI
("AECI" or "the Company" or "the Group")

TRADING STATEMENT: HALF-YEAR ENDED 30 JUNE 2019

In compliance with the JSE Limited Listings Requirements, shareholders and bondholders are advised
that for the half-year ended 30 June 2019 ("the period"), AECI's headline earnings per share ("HEPS")
and earnings per share ("EPS") are expected to be between 357 cents and 376 cents, that is between
18% and 22% lower than the 458 cents achieved for the half-year ended 30 June 2018 ("the prior
corresponding period"). Significant contributors in this regard were as follows:

- As disclosed in the Company's results announcement for the financial year ended 31 December
  2018, published on the Stock Exchange News Service ("SENS") on 26 February 2019, strategic
  realignment projects were initiated in the fourth quarter of 2018 by the Explosives business
  in the Mining Solutions segment (viz. AEL Intelligent Blasting ("AEL")) and by ImproChem,
  which constitutes the Water & Process segment. Both these projects were completed by 30
  June 2019, at an aggregate non-recurring cost of R156 million for the period (estimated HEPS
  and EPS impact of 100 cents). The total cost of these projects was R204 million.

  AEL reviewed its product and service offering, and the structures that support these, mainly
  for the South African narrow reef mining market which has been declining over several years.
  AEL's realignment will ensure that it remains a sustainable and responsible local supplier to
  the South African mining industry.

  ImproChem realigned its go-to-market model to enhance its capabilities and improve service
  delivery and efficiencies.

  It is anticipated that, in the second half of 2019, the benefits of these projects will offset the
  costs incurred in the period. In future years, the sustainable annualised pre-tax benefit is
  expected to be at least R300 million.
                                                 
- Change in significant accounting policies: IFRS 16 Leases, adopted by the Group on 1 January
  2019. The Group adopted this standard using the modified retrospective approach, under
  which the cumulative effect of initial application was recognised in retained earnings as at 1
  January 2019. As a consequence of the adoption of IFRS 16, an estimated 12 cents negative
  impact on both HEPS and EPS was calculated for the period.

The financial information on which this trading statement is based has not been reviewed and
reported on by the Company's external auditors.

AECI's results for the period are expected to be released on SENS on or about Wednesday, 24 July
2019.

Woodmead, Sandton
17 July 2019

Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)

Date: 17/07/2019 07:05:00
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