AECI forecasts over 20% increase in earnings for 2025 amidst operational challenges

AECI, a key player in the mining and chemicals sector in South Africa, foresees significant earnings growth in its year to December 31, 2025, with earnings per share expected to swing back into the black.

The group said in an operational update and trading statement Monday it anticipates basic earnings per share (EPS) will soar, with estimates ranging from 319 to 353 cents for 2025, a major improvement from a loss of 268 cents in 2024. This reflects a variance of about 232%.

Additionally, headline earnings per share (HEPS) is expected to reach between 1 022 and 1 131 cents, marking a 58% increase on the prior year's 716 cents.

AECI's strong performance is buoyed by robust operational efficiencies at its Mining segment, where earnings before interest, taxation, depreciation, and amortisation (EBITDA) is predicted to rise by over 10% despite facing lower revenue figures.

This operational success was primarily attributed to the Mining sector's pricing strategies and improved margin management, which were offsetting a year-on-year decline in revenue that was projected at 8%.

However, challenges persist, particularly at the Modderfontein complex, where operational interruptions including power outages and supply disruptions in key materials like ammonia and lead azide continue to pose difficulties. AECI said that it made notable progress to rectify these issues during the latter half of the financial year.

On the Chemicals front, AECI anticipates a 5% increase in revenue, although it expects a slight dip in EBITDA due to bad debts, with R49 million of R113m bad debts recovered in the latter part of 2025. Notably, the Water business was poised to enhance its performance, significantly driven by its Public Water segment.

In its efforts to streamline operations and enhance financial resilience, AECI has completed the disposal of several businesses within the AECI Managed Businesses segment, which had raised about R2.3 billion. This initiative substantially reduced debt from R3.74bn in 2024 to an anticipated R460m for 2025, resulting in a big reduction in gearing from 31% to a projected 5%.

As AECI prepares for the official results announcement on February 25, 2026, all eyes will be on how these operational improvements translate into sustained profitability and shareholder value amidst the ongoing challenges in the mining and chemicals sectors.

BUSINESS REPORT