AFROCENTRIC INVESTMENT CORPORATION LIMITED - Trading statement

Trading statement

AFROCENTRIC INVESTMENT CORPORATION LIMITED
Incorporated in the Republic of South Africa
Registration Number: 1988/000570/06
JSE Code: ACT
ISIN: ZAE000078416
("AfroCentric")

TRADING STATEMENT

In terms of paragraph 3.4(b)(i) of the JSE Limited Listings Requirements, companies are required to
provide guidance to the market when they are satisfied that a reasonable degree of certainty exists that
the financial results for the financial year ended 30 June 2024 (the "current reporting period") to be
reported on, will differ by at least 20% from the year ended 30 June 2023 (the "previous corresponding
period").

Accordingly, AfroCentric shareholders are advised that:

•   earnings per share for the current reporting period is expected to be between 5.14 cents and 8.20
    cents reflecting a decline of between 73.2% and 83.2% in comparison to the 30.70 cents per share
    in the previous corresponding period (as restated) and reflecting a decline of between 73.3% and
    83.3% in comparison to the 30.56 cents per share in the previous corresponding period (as
    previously reported); and
•   headline earnings per share for the current reporting period is expected to be between 38.51 cents
    and 42.13 cents reflecting an increase of between 6.4% and 16.4% in comparison to the 36.34
    cents per share in the previous corresponding period (as restated) and reflecting an increase of
    between 6.0% and 16.0% in comparison to the 36.20 cents per share in the previous corresponding
    period (as previously reported).

With a first time adoption of IFRS 17 (Insurance Contracts), the prior year earnings per share and
headline earnings per share have been restated with a minimal impact of 0.14 cents.

The decline in earnings for the current reporting period is attributed to the impairments of goodwill
relating to the pharmaceutical cluster's intangible assets in the Group. Adverse price adjustments in
some of the main product lines of the pharmaceutical cluster have had a negative impact on profitability
in the current year and this is expected to continue into the medium term. The synergies and expected
growth in new pharmaceutical product lines are also lagging in terms of the original acquisition
assessments of these assets. The Board has taken a prudent approach to partially impair a combined
value of R130 million of the goodwill that was recognised at the acquisition of Activo Health Proprietary
Limited ("Activo") and the acquisition of its subsidiary, Forrester Pharma Proprietary Limited in 2019
and 2021, respectively.

Further to the Activo impairment, the profitability of Pharmacy Direct Proprietary Limited is also
anticipated to reduce due to lower margins in the private sector delivery market, as well as its new
chronic medication delivery contract with the Department of Health that started in October 2022. An
impairment of goodwill to the value of R100 million has been recognised.

Both companies are experiencing growing revenue which, has been diluted by higher operating
expenses thus resulting in the reduced profitability.

The medical scheme administration cluster has been stable with growth in various public and private
medical schemes during the year.

Further information will be provided in AfroCentric's results for the current financial period, which are
expected to be published on or about 3 September 2024.

The financial information on which this trading statement is based has not been audited, reviewed or
reported on by AfroCentric's external auditors.

Johannesburg
30 August 2024

Sponsor
Questco Corporate Advisory (Pty) Ltd

Date: 30-08-2024 12:10:00
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