AECI, which makes a great deal of asphalt for the road network, would have to source additional bitumen imports due to the closure of oil refineries in the country, chief executive Mark Dytor said yesterday.
Interviewed at the release of the chemical group’s 2021 annual results, he said they had faced problems of shipping shortages, container shortages and high prices of raw materials through 2021 due to global supply chain problems and issues at the ports of Richards Bay and Durban.
Dytor said while the situation had improved since June and July, much work still needed to be done by Transnet to improve efficiencies at the ports.
He said the establishment of a bitumen storage facility at the port in Durban needed to be investigated.
The international chemical group’s revenue grew 8 percent to R26.05 billion in the year to December 31, with foreign and export revenue - the group trades in some 22 countries - comprising 41 percent of the total.
Headline earnings per share increased by a robust 27 percent to 1 116 cents. Profit from operations was up 124 percent to R2.05bn. Gearing remained low at 24 percent. A final cash dividend of 505c per share was declared, bringing to 685c the total dividend for 2021.
Dytor said the strong results showed they were able to navigate three waves of Covid-19 and deal with significant global and local supply chain challenges and higher commodity prices. A stronger average rand had also affected hard currency earnings.
He said they were optimistic about prospects for another good financial year, barring possible negative impacts from worsening socio-political events such as the crisis in Ukraine.
He said the group was also working on possible sustainable acquisitions in the mining, water and agricultural sectors of the group’s business.
The group hoped to benefit from new mining contracts on the continent, expansion of the explosives and related products business into the US, and further development of the agriculture business into the US. The plan was to expand the explosives business in South America and Australia as well.
The group expected to benefit from new water reuse and recycling contracts in Africa, while product sales to the local agriculture sector remained strong. Exports of biostimulants were being increased to the US, he said.
The board said the strong results had demonstrated the benefits of diversification, agility and strategic pillar structure.
AECI Mining and AECI Chemicals, which were the business pillars most affected by Covid-19 in 2020, recovered well in 2021, with AECI Mining benefiting as global mining returned to more normalised levels. AECI Chemicals also benefited from a strategic realignment process completed in 2020.
There were no impairments in the year, compared to 2020 which had been negatively affected by impairments of property, plant and equipment and goodwill of R890 million, mostly relating to the goodwill on the acquisition of AECI Much Asphalt.
AECI Schirm in Germany was negatively impacted in 2021 by the non-recurrence of the 2020 sale of large volumes of hand sanitiser, the stronger rand/euro exchange rate, the impact of supply chain disruptions, raw material and packaging shortages in Europe and poor demand for sugar beet herbicide.
However, it had secured several new tenders in the latter part of the year to supply agricultural crop protection products and fine chemicals.
In late afternoon trade, the share was up 1.24 percent at R114.69, having risen 12.15 percent over three years.
BUSINESS REPORT ONLINE