AECI: Mining digs deep, chemicals splutter
Favourable AECI results fail to reflect in the bottom line
AECI’s recently released set of results was a mixed bag, with revenue and earnings before interest and tax (ebit) showing good double-digit growth on the comparable results of last year.
This decent result was, however, not carried through to the bottom line of the income statement. The headline earnings level showed only 5% growth to 603c a share. This pedestrian bottom-line growth was mainly as a result of a whopping increase in financing costs due to the group’s elevated debt levels. Given the high interest rates, now is not the best time for a business to have huge debt, even if it is within stated debt covenant levels...
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