| Tue 26 Feb 2002, 0:00 | | Aeci Limited - Audited Results For The Year Ended |
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Aeci Limited - Audited Results For The Year Ended 31 December 2001
* Headline earnings per share up 32%
* Final dividend per share up 10%
* Transformation complete
* Trading profit of core operations up 20%
* Outlook positive
Comment
This was another eventful year for the new AECI. Final steps in the
transformation strategy were completed, the overhang of Anglo American's
shareholding was resolved and pleasing growth in headline earnings was
achieved. The Group's performance was particularly creditable when viewed
against the parlous state of the chemical industry globally and the world's
economies in general.
Performance
Headline earnings of 243 cents per ordinary share increased by 32 per cent
on the prior year, boosted by the reduction in the number of shares in issue
to 93 million following the buy-back of 62 million shares from Anglo
American in January 2001. The final dividend has been raised by 10 per cent
to 55 cents per share to bring the total dividend for the year to 87 cents
per share (80 cents in 2000) with a dividend cover of 2.8 (2.3 in 2000).
While Group revenue and trading profit increased by 12 and 4 per cent
respectively, the core businesses of Mining Solutions, Specialty Chemicals
and Specialty Fibres posted gains of 23 per cent in revenue and 20 per cent
in trading profit. This impressive performance in difficult trading
conditions provides further validation of the Group's strategic focus on
specialty product and service solutions which add value for customers.
The sharp decline in the external value of the rand during the fourth
quarter of the year had a net positive impact on trading and earnings.
Translation gains on the Group's net investment in activities outside South
Africa, however, were recognised through reserves and not through the income
statement.
Transformation
Major features of the transformation programme accomplished during the year
were the buy-back of shares from Anglo American, which subsequently sold
most of its residual holding in the Company, the disposal of the Group's
interests in Kynoch Fertilizer and AECI Bioproducts and the closure of the
fine chemicals development unit. This programme led to exceptional charges
of R283 million after tax, made up primarily of losses on disposal of Kynoch
Fertilizer and AECI Bioproducts of R87 million and R88 million respectively.
The balance arose mostly from restructuring and the closure costs of
discontinued operations. It is not envisaged that further exceptional
charges will be incurred in 2002.
Financial
The Group's net borrowings rose to R987 million at year-end as a result of
the share buy-back, the cash portion of exceptional charges, and the high
level of capital and investment expenditure incurred by core businesses.
SANS Fibres in particular spent R170 million on growth projects including
the new specialty nylon spinning and drawing platforms in Bellville, Western
Cape and North Carolina, USA which are in the process of being commissioned.
Cash interest cover was 5.1 times for the year while gearing at year-end was
contained to 40 per cent of shareholder funds.
On 15 January 2002, a further payment of R186 million was made to Anglo
American in terms of the share buy-back agreement approved by shareholders
in January 2001. Secondary tax of R23 million in respect of this deemed
distribution will be paid on 28 February 2002. These post-balance sheet
events have not been recognised in the 2001 financial statements.
Outlook
While the global economy and chemical industry are only expected to pick up
towards the end of 2002, the new AECI's coherent structure, lower cost base
and more specialised business portfolio provides a sound basis for further
improvements in performance. The lower level of the rand will also benefit
the core businesses both in terms of export opportunities and
competitiveness in the domestic market. The Group therefore expects further
real earnings growth in 2002.
Dividend
A formal announcement of the dividend declared by the Board is published
separately from this announcement.
Alan Pedder Lex van Vught
Chairman Chief Executive
Sandton
25 February 2002
www.aeci.co.za
Group income statement
% 2001 2000
Note change R millions R millions
Revenue (1) +12 6 745 6 009
Net trading
profit +4 492 474
Net financing
costs (141) (27)
Income from
associates
and investments 25 10
376 457
Provision for
post-employment
medical benefits (20) -
Amortisation of goodwill (56) (30)
Exceptional items (371) (30)
Net (loss)/profit
before taxation (71) 397
Taxation 3 (121)
Normal activities (85) (137)
Exceptional items 88 16
Net (loss)/profit (68) 276
Attributable to
preference and
outside shareholders (20) (32)
Normal activities (45) (35)
Amortisation of goodwill 12 -
Exceptional items 13 3
Net (loss)/profit
attributable to
ordinary shareholders (88) 244
Headline earnings
are derived from:
Net (loss)/profit
attributable to
ordinary shareholders (88) 244
Amortisation of goodwill 44 30
Net exceptional items 270 11
226 285
Headline earnings per
ordinary share (cents) +32 243 184
Attributable (loss)/
earnings per ordinary
share (cents) (95) 158
Dividends declared per
ordinary share (cents) 87 80
Ordinary shares (millions) (2)
- in issue 93 155
- weighted average number
of shares 93 155
Notes
(1) Includes exports of R1 783 million (2000 - R1 189 million).
(2) In January 2001 the Company repurchased 61 866 725 of its own ordinary
shares, representing 40% of the issued share capital, from Anglo South
Africa (Pty) Limited.
(3) Accounting policies are consistent with those applied in the previous
financial year other than the introduction of AC 107 (Revised) in regard to
accounting for dividends declared. Comparative figures have been restated.
Group industry segment analysis
Net trading
Revenue profit Assets
R millions 2001 2000 2001 2000 2001 2000
Mining
solutions 1 474 1 254 142 116 887 820
Specialty
chemicals 2 415 1 955 232 200 912 642
Specialty
fibres 1 717 1 355 161 128 945 688
Property 149 139 9 33 675 666
Other
businesses 1 002 1 084 22 27 222 403
Group
services,
development
and
intergroup (54) (179) (73) (62) (4) 13
6 703 5 608 493 442 3 637 3 232
Discontinued
operations 42 401 (1) 32 (2) 108
6 745 6 009 492 474 3 635 3 340
Assets consist of property, plant, equipment and goodwill, inventory,
accounts receivable and accounts payable.
Group balance sheet
as at 31 December 2001
2001 2000
R millions R millions
Assets
Non-current assets 2 606 2 482
Property, plant and equipment 1 910 1 798
Goodwill 525 428
Investments 171 256
Current assets 3 277 3 291
Inventory 1 231 1 035
Accounts receivable 1 469 1 219
Cash and cash equivalents 577 1 037
Total assets 5 883 5 773
Equity and liabilities
Ordinary capital and reserves 2 264 3 061
Preference capital and
outside shareholders' interest 211 177
Total shareholders' interest 2 475 3 238
Non-current liabilities 1 391 184
Deferred taxation (207) (182)
Long-term borrowings 1 248 38
Long-term provisions 350 328
Current liabilities 2 017 2 351
Accounts payable 1 530 1 160
Provision for restructuring 109 62
Short-term borrowings 316 1 073
Taxation 62 56
Total equity and liabilities 5 883 5 773
Group statement of changes in shareholders' equity
2001 2000
R millions R millions
Headline earnings 226 285
Amortisation of goodwill net
of outside shareholders' interest (44) (30)
Exceptional items net of
taxation and outside
shareholders' interest (270) (11)
Net (loss)/profit attributable
to ordinary shareholders (88) 244
Dividends paid (76) (123)
Foreign currency translation
differences net of deferred taxation 140 20
Ordinary shares issued 2 -
Net (decrease)/increase in
equity for the year before
share buy-back (22) 141
Repurchase of own shares (775) -
Equity at the beginning of the year 3 061 2 920
Equity at the end of the year 2 264 3 061
Made up as follows:
Share capital and share premium 95 228
Non-distributable reserves 662 608
Surplus arising on revaluation
of property, plant and equipment 391 525
Foreign currency translation
reserve net of deferred taxation 182 50
Retained earnings of associates 84 31
Other 5 2
Retained income 1 507 2 225
2 264 3 061
Group cash flow statement
2001 2000
R millions R millions
Cash generated by operations 660 608
Dividends received 2 10
Net financing costs (141) (27)
Taxes paid (74) (64)
Changes in working capital (72) (149)
Expenditure relating to
long-term provisions (14) (20)
Expenditure relating to
restructuring (74) (190)
Cash available from operating
activities 287 168
Dividends paid (87) (134)
Cash retained from operating
activities 200 34
Cash utilised in investment
activities (470) (212)
Proceeds from disinvestment
and restructuring 65 224
Expenditure on repurchasing
own shares (775) -
Net cash (utilised)/generated (980) 46
Cash effects of financing
activities 464 97
Proceeds from issue of new shares 2 -
(Decrease)/increase in liquid funds (514) 143
Cash and cash equivalents at the
beginning of the year 1 037 889
Translation gain on cash and
cash equivalents 54 5
Cash and cash equivalents at
the end of the year 577 1 037
Group other salient features
2001 2000
R millions R millions
Capital expenditure 424 271
- expansion 276 147
- replacement 148 124
Capital commitments 102 235
- contracted for 92 143
- not contracted for 10 92
Future rentals on property,
plant and equipment leased 179 162
- payable within one year 40 42
- payable thereafter 139 120
Net contingent liabilities
and guarantees 160 289
Net borrowings 987 74
Gearing (%) 40 2
Current assets to current
liabilities (ratios) 1.6 1.4
Net asset value per ordinary
share (cents) 2 430 1 975
Depreciation 221 205
AECI LIMITED
Incorporated in the Republic of South Africa
(Registration No. 1924/002590/06)
Share code: AFE ISIN No: ZAE000000220
Transfer secretaries
Computershare Services Limited
41 Fox Street, Johannesburg
and
Computershare Investor Services PLC
PO Box 82, The Pavilions
Bridgewater Road
Bristol BS99 7NH
England
Registered office
First floor
AECI Place
24 The Woodlands
Woodlands Drive
Woodmead
Sandton
Sponsor
JP Morgan
AEL
Mining solutions
Development, manufacture and supply of value-adding services, initiating
systems and explosives.
Chemical Services
Limited
Specialty chemicals
Largest specialty chemical operation in southern Africa, supplying a diverse
range of specialties, raw materials and related services to a broad spectrum
of industries.
SANS FIBRES
Specialty fibres
Production, marketing and distribution of specialty nylon and polyester yarn
for local and export markets; production of PET bottle polymer.
Specialty
product and
service solutions
