AECI Says South Africa’s Platinum Strike Bites Into 2014 ProfitKamlesh Bhuckory
AECI Ltd., a South African manufacturer of explosives and chemicals, won’t recover this year from the effect of a five-month strike in the platinum industry, Chief Executive Officer Mark Dytor said.
“It was quite bad,” he said in a phone interview from Johannesburg today. “We are still counting.”
The world’s biggest miners of the metal, including Anglo American Platinum Ltd., are recovering from a walkout that cost producers 24.2 billion rand ($2.3 billion) in revenue. South Africa, the continent’s second-biggest economy, will expand 1.7 percent this year according to the central bank, down from a previous estimate of 2.1 percent. The strike pushed the economy into contraction in the first three months of this year as mining output plunged.
AECI said today profit for the six months ending June rose 51 percent to 601 million rand, augmented by gains from sales of surplus property. Revenue rose 11 percent to 8 billion rand. Explosives sales were little changed at 3.55 billion rand during the period, according to the statement.
Dytor said the mining strike had cost AECI about 250 million rand in operating profit in the period after sales slumped.
“We’re going to be lucky to get them back onto a normalized sort of route,” Dytor said. “I don’t think they are going to give us any catch-up in the next six months at all.”
Shares of the Johannesburg-based company fell as much as 1.7 percent and traded 0.8 percent down to 122 rand by 11:36 a.m. in Johannesburg, valuing the company at 15.7 billion rand. The stock has declined 2.4 percent this year compared with a 16 percent gain for competitor Omnia Holdings Ltd.