South Africa’s largest explosives-maker takes a hit

AECI faced a tough financial year, reporting a net loss due to lower profitability and impairments.

AECI released the results of its 2024 financial year on Wednesday, 16 February 2025, which revealed a decline in its performance compared to 2023.

AECI is a diversified chemicals company with regional and international businesses in Africa, Europe, Southeast Asia, North America, South America, and Australia. 

Its products and services are provided to a wide range of customers in the mining, water treatment, plant and animal health, food and beverage, infrastructure, and general industrial sectors.

Its mining division, AECI Mining Chemicals, has the largest mining chemicals manufacturing facility on a single site in the southern hemisphere

In its 2024 financial year, AECI’s revenue declined by 3.72% to R33.6 billion, compared to R34.9 billion the year before.

The company’s profitability also took a significant hit, with operating profit down 37.5% to R1.5 billion.

Concerningly, the company swung from a net profit of R1.18 billion in 2023 to a net loss of R255 million in its 2024 financial year.

AECI made a basic loss per share of 268 cents, compared to earnings per share of 1,112 cents the prior year.

The company explained that 2024 was the first full year of execution of its new strategy.

AECI is implementing a new strategy to double its profits by 2026 while simultaneously reducing its emissions.

The company is focusing heavily on expanding its mining explosives business globally, particularly in Europe, Latin America, and the Asia-Pacific region, through both organic growth and acquisitions.

COO Denvor Govender emphasized that the mining sector will be the key driver of future earnings, positioning AECI among the top three global mining-explosives companies by 2030.

The shift in focus comes after a decade of underperformance, with AECI’s stock losing half its value in dollar terms.

In its latest results, the company said the execution of this new strategy means it had to make some necessary concessions which are key enablers in the successful execution of the strategy. 

“The reported results reflect the impact of these strategic enablers, which include strategic divestments, transformation investments, and one-off impairments,” it said. 

“These enablers underpin the transitionary phase of our strategy and form a platform on which the group can build towards achieving strong and sustainable future performance.”

These impairments include an impairment of R240 million due to a weaker-than-expected performance at the company’s Schirm Germany operations.

The company’s net impairments and asset derecognition in the period totalled around R1.1 billion.

The company also signed sale agreements for its AECI Animal Health and AECI Much Asphalt businesses as part of efforts to streamline its operations under the new strategy.

“2024 has been a transformative year for the group, with significant progress made against our strategy execution programme,” CEO Holger Riemensperger said. 

“While we made concessions that affected the group’s financial performance for the year, our progress and achievements to date in executing the strategy reinforce our confidence in our ability to meet our long-term strategic ambitions.”

AECI declared a final dividend of 219 cents per ordinary share.