2024 interim results

Our stated ambition as the AECI Group is to double profitability of our core businesses by 2026 and to attain a global market position in Mining of ^#3 by 2030.

In the first six months of this year, we made strides in investing in the capabilities required to execute on our strategy and have commenced delivering on the milestones set. This positions the businesses for improved operational efficiencies, overall performance and profitability in the short to medium term, as well as sustainable growth in the long term.

Pleasingly, we achieved the following key strategic milestones in the first half of 2024:

• New executive leadership is in place
• The restructure of the organisation in line with our new operating model to the third level below the Executive Committee
• A leadership compact, culture code and desired behaviours developed to foster a high-performance culture
• The sale of AECI Animal Health in line with our portfolio optimisation journey
• R400m EBITDA run rate delivered
• R800m organic mining and chemicals growth projects defined
• Enhanced mining digital platform for high-performance initiating systems and cutting-edge electronics technology is being launched
• Increased investment in maintenance to ensure the prolonged life of our existing asset base

Our strategic transition is progressing well. With the focus and investment, we have dedicated in the first half of the year, we anticipate continued momentum and substantial value realisation in the second half of the year and the future.

2023 annual results

The Group achieved strong results for the financial year ended 31 December 2023, with revenue up 5.4% from the prior year. Notably, EBIT was 25.6% higher than the prior year, reflecting increased profitability in the core businesses. The profit for the year grew by 23.4%, driven by the robust financial performance of AECI Mining. This achievement comes despite a 63.4% surge in net finance costs attributed to elevated debt levels associated with the turnaround of AECI Schirm Germany, sustained elevated working capital levels and rising interest rates.

Basic earnings per share grew by 26.7%, while headline earnings per share decreased by 150 cents, reaching 1 137 cents. In the prior year, the Group earnings included a R471 million impairment on property, plant and equipment, operational losses and a deferred tax write-off associated with AECI Schirm Germany. It’s worth noting that once-off impairments were excluded from the headline earnings in the prior year.

Headline earnings per share were impacted by increased finance costs, attributed to the rise in interest rates and short-term funding to accommodate increased working capital levels during the year, to alleviate the impact of supply constraints on customers.