JSE-listed explosives and gas firm, AECI, on Tuesday said the prolonged platinum strike and South Africa’s underperforming economy have negatively impacted its business in the six months to June this year.
Platinum companies have become important customers of AECI as the company drives its mining solutions strategy.
The five-month-long strike by workers belonging to the militant Association of Mineworkers and Construction Union (AMCU) had affected production at the platinum mines owned by the world’s three biggest platinum producers, Amplats, Implats and Lonmin.
The South African economy recorded negative growth in the first quarter of this year.
However, revenues during the period under review surged 11 percent to R7.9 billion ($746 million) from R7.2 billion ($679.7 million). Revenue generated outside South Africa was R2 billion ($189 million), about 31 percent of total revenue.
Profit from operations soared 33 percent to R814 million ($77 million) from R612 million ($58 million) in the previous corresponding period. Headline earnings increased 9 percent R436 million ($41.1 million).
“On 20 March 2014, the bulk property sale transaction at Modderfontein became effective and thus cash of R1 billion ($94.4 million) (including VAT) was received,” it said, adding that profit from operations relating to the transaction was R421 ($40 million) before tax.
The Modderfontein property assets were sold to Shanghai Zendai, the Chinese real estate developer.
AECI said the deal had been successfully completed and that there were no outstanding conditions in the transaction.
The company’s massive property assets, on which it often experimented with its commercial explosives, had become extra burden to the company because the advancement in explosives expertise has meant the company now has to have smaller pieces of land for experimenting. (VENTURES AFRICA)