Aeci 5 1/2% Prf Regulatory News (87FZ)

AECI Limited - Trading Statement: Half Year Ended 30 June 2019

PR Newswire

London, July 16

AECI LIMITED

Incorporated in the Republic of South Africa

(Registration number: 1924/002590/06)

Share code: AFE ISIN: ZAE000000220

Hybrid code: AFEP ISIN: ZAE000000238

Bond company code: AECI

(“AECI” or “the Company” or “the Group”)

TRADING STATEMENT: HALF-YEAR ENDED 30 JUNE 2019

In compliance with the JSE Limited Listings Requirements, shareholders and bondholders are advised that for the half-year ended 30 June 2019 (“the period”), AECI’s headline earnings per share (“HEPS”) and earnings per share (“EPS”) are expected to be between 357 cents and 376 cents, that is between 18% and 22% lower than the 458 cents achieved for the half-year ended 30 June 2018 (“the prior corresponding period”). Significant contributors in this regard were as follows:

As disclosed in the Company’s results announcement for the financial year ended 31 December 2018, published on the Stock Exchange News Service (“SENS”) on 26 February 2019, strategic realignment projects were initiated in the fourth quarter of 2018 by the Explosives business in the Mining Solutions segment (viz. AEL Intelligent Blasting (“AEL”)) and by ImproChem, which constitutes the Water & Process segment. Both these projects were completed by 30 June 2019, at an aggregate non-recurring cost of R156 million for the period (estimated HEPS and EPS impact of 100 cents).The total cost of these projects was R204 million.

AEL reviewed its product and service offering, and the structures that support these, mainly for the South African narrow reef mining market which has been declining over several years. AEL’s realignment will ensure that it remains a sustainable and responsible local supplier to the South African mining industry.

ImproChem realigned its go-to-market model to enhance its capabilities and improve service delivery and efficiencies.

It is anticipated that, in the second half of 2019, the benefits of these projects will offset the costs incurred in the period. In future years, the sustainable annualised pre-tax benefit is expected to be at least R300 million.

Change in significant accounting policies:IFRS 16 Leases, adopted by the Group on 1 January 2019.The Group adopted this standard using the modified retrospective approach, under which the cumulative effect of initial application was recognised in retained earnings as at 1 January 2019.As a consequence of the adoption of IFRS 16, an estimated 12 cents negative impact on both HEPS and EPS was calculated for the period.

The financial information on which this trading statement is based has not been reviewed and reported on by the Company’s external auditors.

AECI’s results for the period are expected to be released on SENS on or about Wednesday, 24 July 2019.

Woodmead, Sandton

17 July 2019

Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)