AECI's earnings to be more than 20% down

AECI has warned that its headline earnings per share and earnings per share for the six months to the end June are expected to be more than 20% lower than last time.

AECI says this is due to:

* AECI Broad-based Black Economic Empowerment transactions were effected during the period.

HEPS and EPS will be reduced by the recognition of costs in terms of International Financial Reporting Standards.

An IFRS 2 cost of about R148 million will be recognised in respect of the AECI Community Education and Development Trust and the accrual of a portion of the IFRS 2 cost in respect of the AECI Employees Share Trust.

The combined effect of these two charges alone will be a reduction in HEPS of 138cps.

Furthermore 4.7 million AECI ordinary shares were issued in terms of the KTH transaction, with this additional weighted average number of shares diluting HEPS and EPS.

* Mining and manufacturing production have remained volatile in a demanding global operating environment, with mining in South Africa experiencing a number of disruptions.

* AEL Mining Services has experienced some raw material and production difficulties at its nitric acid plants in Modderfontein and has also not met the production targets set for its ISAP plant. Although the business has responded appropriately, it expects that operating profit will be lower than that achieved in the prior corresponding period.

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