AECI's H1 profits plunge after restructuring charges

01 August 2001 16:33  [Source: ICIS news]

2LONDON (CNI)--AECI's pre-tax profits plunged to Rand11m ($1.3m/Euro1.5m) for the first half of the year from Rand160m last time, as a result of exceptional charges relating to its restructuring programme, plus higher financing costs.

The South African chemicals group said Wednesday that excluding exceptional items, pre-tax profits fell to Rand125m from Rand160m, a decline of 26%.

In its H1-2001 results, AECI booked a Rand60m loss relating to the disposal of its stake in Kynoch Fertilizer and a Rand54m provision in connection with the discontinuation of non-core components of the specialty chemicals subsidiary Chemical Services (Chemserve).

Group revenues for the first six months of the year grew 11% to Rand3.25bn, with exports up 39% at Rand833m. Trading profits fell 5% to Rand200m. AECI said that for its continuing operations, revenues and trading profits both increased 25%.

Earnings per share (EPS) increased 30% to 95 cent, and the group said that following its restructuring it is well positioned to raise EPS in the second half of the year. However, it noted that trading conditions for H2 are "less likely to be favourable" than previously envisaged.

Trading profits and revenues increased in all three of AECI's main businesses: Chemserve; the specialty fibres unit Sans Fibres; and the mining solutions unit African Explosives. AECI said additional polyethylene terephthalate (PET) capacity at Sans Fibres and acquisitions by Chemserve offset flat-to-lower demand in most sectors in the domestic economy.

Exports were boosted by the weaker rand exchange rate, the group noted, but "the widening effects of the economic downturn in the US became progressively evident in Q2 with sharp cutbacks in international demand for industrial yarns from Sans Fibres".

Chemserve's trading profits rose 9% to Rand101m on sales up 19% at Rand1.12bn. AECI said solid gains in most of Chemserve's portfolio were offset by continued underperformance of the technical coatings business.

At Sans Fibres, trading profits surged 34% to Rand78m on revenues up 39% at Rand874m. Demand for industrial yarns and PET exceeded expectations, the group said.

Profits from African Explosives rose 20% to Rand60m on revenues up 18% at Rand683m. AECI said the contribution from foreign operations increased.

By: Anna Jagger
+1 713 525 2653

< previous article(VIDEO – ICIS news Americas Lunchtime Bulletin 30 Oct 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly