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Johannesburg - Explosives and chemicals firm AECI said on Tuesday it will retrench 1 000 workers at AEL, its mining operations division, by the end of the year.
As part of its restructuring programme, CEO Graham Edwards said: "Towards the end of this year or the beginning of next year, retrenchments are going to come through in big numbers."
So far, AECI has laid off 220 employees: 200 at Chemserve and 20 at AEL.
The 1 000 jobs at risk will be a result of AEL's "factory of the future" coming into operation. This initiating systems automated plant, valued at R620m, will replace the 1 000 labour-intensive jobs.
Commenting on its interim financial performance, the company said restructuring cost R30m. It expected further restructuring in the second half of the year to amount to the same.
Capex demands
In June AECI's expenditure plans were said to be well covered at four times its interest expenses. However, this figure has now dropped to 2.8.
"The company's demanding capex programme has meant all six of AECI's capex projects - estimated to cost R2bn - have been re-examined," said Chemserve MD Frank Baker.
The company has spent R675m this reporting period on capex, which includes R544m for expansion projects. Its total capex budget for the year is R1.2bn.
Baker admitted the company's gearing at 75%, driven by its capex plan, was "still quite high". However, he said future returns remain attractive.
On Tuesday AECI's shares traded unchanged at 5 050c/share.
- Fin24.com