AECI Ltd

Revenue from continued operations declined 4% to ZAR 15.1 billion versus ZAR 15.7 billion a year ago; excluding businesses disposed of in 2025, group revenue increased 3%. EBITDA from continuing operations increased 2% to just over ZAR 1.6 billion, and after adjusting for disposed businesses, EBITDA increased 11% period-on-period. Profit from continuing operations rose to ZAR 837 million from ZAR 699 million. Basic EPS increased 18% to ZAR 3.48 and headline EPS increased 8% to ZAR 6.53. The group recorded a ZAR 330 million impairment charge, mainly tied to Schirm Germany, including ZAR 320 million of goodwill and intangible assets. Free cash flow was a ZAR 952 million outflow; net working capital rose to 19% of revenue from 17%; cash and cash equivalents were ZAR 2.5 billion; net debt was ZAR 1.7 billion; gearing was 15%; capital expenditure was ZAR 417 million. Looking ahead, management expects H2 working capital unwind to support improved free cash flow, Mining margins to improve as cost-recovery timing normalizes, and Chemicals core to benefit from strong sulfur derivatives demand, the planting season, and better export and customer demand. The interim dividend was declared at ZAR 1.16 per share, with management noting full-year dividend levels will depend on H2 working capital release.

Alan Dickson framed the period as progress against three priorities: leveraging core businesses, improving resilience, and enhancing earnings quality. He said the core assets performed well, the group stayed largely uninterrupted despite geopolitics and raw-material disruption, and management is focused on supply chain resilience, operational reliability, and unlocking better free cash flow in H2. His tone was optimistic but measured, with Schirm still clearly a problem and the strategic refresh centered on improving quality of earnings rather than aggressive portfolio moves.

Ian Kramer highlighted the segment reporting change after the sale of businesses earmarked for disposal, with AECI Managed now folded into Chemicals. He walked through the main numbers: revenue of ZAR 15.1 billion, EBITDA just over ZAR 1.6 billion, profit from continuing operations of ZAR 837 million, depreciation/amortization/impairments of ZAR 760 million, and a ZAR 330 million impairment at Schirm Germany. He also stressed balance-sheet strength with cash of ZAR 2.5 billion, net debt of ZAR 1.7 billion, gearing at 15%, capex of ZAR 417 million, and free cash outflow of ZAR 952 million driven by working capital build; the dividend was set at a 3x cover within the 1.5x to 3x policy range.

Analysts focused on Mining volume growth by geography, ammonia sourcing, the impact of a super El Niño on Plant Health, working-capital inventory buildup, Schirm losses, the group’s ROIC gap versus Mining, Modderfontein capex, and whether buybacks or acquisitions were being considered. Management said Mining volume growth was strongest in South Africa, Francophone West Africa, Mali, and Asia Pacific, while ammonia sourcing remains roughly 90% domestic and 10% imported. They said El Niño could affect Plant Health volumes and cash unwind, Schirm needs volume recovery after plant underperformance in January and February, Modderfontein optimization is still expected to take ZAR 700 million to ZAR 900 million over 3 to 4 years, and there is no current share buyback program; acquisitions, if any, would likely be small bolt-ons within the core strategic pillars.