JSE-listed AECI’s earnings and profit for the year ended December 31, 2024, decreased year-on-year as the group executed its new strategy and made several concessions to enable this.

The reported results are said to reflect the impact of these strategic enablers which include strategic divestments, transformation investments and one-off impairments. 

The group is seeking to double the profitability of its core businesses by 2026 and to secure a global market position of third in mining by 2030. CEO Holger Riemensperger told Engineering News that the results are a testament to successful strategy execution. 

Revenue from continuing operations was down 3.8% year-on-year to R33.6-billion, while earnings before interest, taxes, depreciation and amortisation (Ebitda) from continuing operations decreased by 12.7% year-on-year to R3.03-billion.

Profit from continuing operations decreased by 36.8% year-on-year to R1.5-billion and headline earnings a share by 37% to R7.16.

AECI reported a basic loss a share of R2.68, compared with earnings a share of R11.12 in 2023.

Working capital, at 16% of revenue, and gearing, at 31%, are within target ranges.

AECI declared a final cash dividend of R2.19 a share for the period.

The group said steady progress was being made with the roll-out of its strategy.

As part of the strategy, it implemented a new operating mode; rolled out its leadership compact and culture code; signed sale agreements for AECI Animal Health and AECI Much Asphalt; delivered an Ebitda run rate of R800-million for the year and converted R504-million of the run rate into profit and loss.

AECI also advanced its globalisation strategy by leveraging its chemical expertise to further internationalise its business, expand into Peru and significantly enhance its presence in Australia.

Until December 31, 2023, AECI’s operating businesses were structured into four key segments: AECI Mining, AECI Water, AECI Agri Health and AECI Chemicals.

In line with its strategy of optimising the portfolio, these have been restructured into AECI Mining, AECI Chemicals, AECI Property Services and Corporate and AECI Managed Businesses.

AECI Mining's operational performance for the year was mainly impacted on by weak market conditions, coupled with inefficient global logistics. Profit from operations fell by 24.8% to R1.6-billion.

AECI Chemicals’ performance was impacted on by ongoing challenges in the South African manufacturing and industrial sectors, along with an oversupply of key products that exerted pressure on pricing and demand.

Despite these challenges, the business achieved a significant increase in profit from operations, driven by disciplined cost management and enhanced operational efficiencies, increasing by 30% to R823-million.

For AECI Managed Businesses, progress was made with the divestment strategy, following the signing of sale agreements for AECI Much Asphalt (classified as a discontinued operation) and AECI Animal Health, two of the six targeted divestments. These transactions are expected to close in the first half of the 2025 financial year.

The segment reported an operational loss of R383-million with all businesses, except AECI Schirm, reporting profits.

AECI Property Services and Corporate recorded a loss of R1.3-billion, compared with earnings of R106-million in 2023.

AECI’S focus for this year shifts from the transition phase of its strategy to the execution phase with an emphasis on driving cost savings, preparing for growth and focusing on free cashflow generation. 

Riemensperger lauded the delivery of the team despite a challenging 2024. This and next year are also expected to be challenging, however, he is bullish that the company would further progress its divestments and achieve its commitments. 

Chairperson Dr Khotso Mokhele has elected to retire as a director of the company at the conclusion of the upcoming AGM of AECI, expected to be held on May 27, following a stint of nine years.

Independent nonexecutive director Philisiwe Sibiya will succeed Mokhele as chairperson.