Africa-Press – South-Africa. Africa’s biggest commercial explosives maker, AECI, saw its impairment charges rise significantly due to divestments in the first half of its 2025 financial year, though earnings growth remained strong.
AECI is a diversified group with regional and international businesses in Africa, Europe, South East Asia, North America, South America and Australia.
The company’s businesses are managed through four growth pillars: Mining, Water, Agri Health, and Chemicals.
AECI released its interim results for the six months ended 30 June 2025 on Wednesday, 30 July 2025. These results showed a mixed bag for the explosives maker.
Revenue was down slightly from R16.06 billion in the first half of 2024 to R15.69 billion in H1 2025, a 2% decline.
Positively, the company recorded significant earnings growth over the six-month period, with EBITDA up 24% to R1.58 billion and basic earnings per share up 70% to 308 cents per share.
AECI explained that an improved EBITDA, lower net finance costs and a lower effective tax rate primarily drove this earnings growth.
However, it noted that this growth was partially offset by costs associated with the group’s divestment strategy.
This strategy saw AECI dispose of a number of businesses in the period, which drove up its impairment charge.
The company recognised an impairment charge of R337 million, mainly on fair value adjustments to the disposal of its Food and Beverage Business and the business of Baar-Ebenhausen.
These increased charges negatively impacted AECI’s profit from continuing operations, which decreased from R746 million in 2024 to R699 million.
However, positively, AECI’s core business profit from operations increased by 30% to R1.07 billion (H1 2024: R820 million).
The company also monitored costs closely this period, with its net finance costs from continuing operations decreasing by 36% to R182 million.
This decline was driven by reduced debt levels and a lower effective interest rate, mainly resulting from the proceeds received on the conclusion of its Much Asphalt divestment.
Capital expenditure (capex) for the period was R351 million, of which R277 million was for maintenance, and R74 million was for expansion.
The company explained that capex in the period was deferred as a result of a shift in management focus after the operational challenges it experienced at the Modderfontein facility.
These challenges were related to the power interruptions experienced in the first half of the period and disruptions in Lead Azide supply.
In light of these results, AECI’s board declared an interim dividend of 100 cents per share.
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