Last checked at 28 Nov 2007 12:01
AECI LIMITED
(Incorporated in the Republic of South Africa)
Registration No. 1924/002590/06
Share code: AFEISIN number: ZAE00000020("AECI" or "the Company")TRADING STATEMENT
As previously reported, AECI expects that earnings per share in the 2007 financial year will be significantly lower than the record results achieved in 2006. Headline earnings per share (HEPS) are estimated to be between 400 and 440 cents per share (48 to 53 per cent lower than the 853 cents per share reported in 2006).
Attributable earnings per ordinary share are expected to be between 560 and 610 cents per share, or 26 to 32 per cent lower than the 829 cents per share earned in 2006.
The main reason for the decline in earnings in 2007 is that 2006 earnings, both headline and attributable, were boosted by an aggregate of 410 cents per share as a result of two unusual transactions. The Company realised a large gain on disposal of its Milnerton site equivalent to 200 cents in earnings per share; and, in the second half-year, earnings per share were enhanced by 210 cents as a result of the creation of a Pension Fund employer surplus account.
Furthermore, 2007's results have been impacted negatively by a provision for the closure of parts of the SANS Fibres business currently estimated at 208 cents per share of which 95 cents per share will be included in HEPS. Against this, the after tax profit on the sale of Dulux, the Company's decorative coatings business, has contributed 300 cents per share but this is excluded from HEPS in terms of Circular 8/2007 issued by The South African Institute of Chartered Accountants.
Chemical Services continues to grow at a fast pace, although, with increased raw materials costs due to high oil prices, the rate of growth in the second half of the year is slower than the first half. Trading losses at SANS Fibres in the second half-year and lower profitability in African Explosives as a result of reduced detonator volumes and delays in operating new equipment to design capacity, mean that trading profit from continuing operations of the Group is expected to be slightly lower than in 2006.
The information in this trading statement has not been reviewed and reported on by the auditors of the Company. It is issued in terms of the Listings Requirements of the JSE Limited, whereby a listed company must publish such a statement as soon as it is satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported upon next will differ by at least 20 per cent from that of the previous corresponding period.
The Group financial results for the year ending 31 December 2007 will be published on Tuesday, 26 February 2008.
Woodmead, Sandton28 November 2007Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
AECI LTD