South African chemicals and explosives maker AECI posted a 57 percent rise in 2013 earnings on Tuesday, lifted by a weaker local currency as it grew its business in the African mining sector.
AECI said headline earnings per share totalled 791 cents in the year to end-December compared with 547 cents a year earlier. Headline EPS, South Africa’s primary profit gauge, exclude certain one-off items.
The company said it had benefited from the weakening rand as more than 50 percent of its revenue is generated outside South Africa and is mostly denominated in U.S. dollars.
“The African business continued to expand its already extensive footprint as a result of an increase in mining activity with the commissioning of three new bulk explosive plants in Burkina Faso, Democratic Republic of Congo, and Egypt,” the company said.
In South Africa, AECI said explosives volumes grew almost seven percent despite lower gold and platinum prices.
The performance of companies such as AECI are among the many indicators of the health of South Africa’s mining sector, which showed signs of recovery last year after being hit by a wave of violent wildcat strikes in 2012.
Currently, a huge strike in the platinum sector which is almost five weeks old is seen constraining the company’s domestic markets this year along with declining margins.
“The narrow reef platinum and gold sectors are expected to remain under pressure owing to weaker commodity prices and escalating costs. Industrial action will have a negative effect on local markets,” it said, adding that South African growth was seen in coal, iron ore and open cast mining.