SOUTH AFRICA – Hulamin, a Pietermaritzburg-based specialist in rolled aluminum products, has reported its half-year results for FY24, showing mixed performance metrics.
The group’s normalized EBITDA decreased by 19% year-on-year to R343 million (US$19.28m), with rolled product sales declining by 3% to 87,340 tonnes.
Operating profit also dropped by 8% to R433 million (US$24.34m), while basic normalized earnings per share saw a significant 38% reduction to 43 cents.
The company defines normalized headline earnings per share (HEPS) as earnings adjusted for metal price lag and non-trading items, providing a clearer view of ongoing activities. Adjustments were made for the period under review for metal price lag and restructuring costs.
Despite the declines, Hulamin recorded an 8% growth in local demand, particularly driven by the can market, which accounted for 67% of local sales.
CEO Mark Gounder noted that the company is facing continued pressure in export markets, particularly in the EU.
Hulamin invested R302 million (US$16.98m) in capital expenditures during the first half of the year, focusing on simplifying its product range, increasing scrap material usage, reducing costs, and positioning the business for growth in structural markets. No dividend was declared for the period.
While the overall performance in the first half was weaker compared to the same period last year, it was substantially better than the second half of FY23.
CFO Pravashni Nirghin highlighted that normalized HEPS improved from 7 cents in H2 FY23 to 43 cents in H1 FY24, and normalized EBITDA grew from R195 million (US$10.96 million) to R343 million (US$19.28 million).
The hot-rolled products division contributed R264 million (US$14.84 million) to headline earnings, while the extrusions business reported a R19 million (US$1.07 million) loss, primarily due to lower automotive volumes and market challenges.
Gounder emphasized the company’s focus on optimizing available plant capacity for higher-margin products following a fire outbreak in the coil coating line that temporarily impacted the export market. The repair work is on track, with production expected to resume by mid-September.
Looking ahead, Hulamin is expanding its wide can-body line in South Africa to meet the growing demand for locally produced wide-width can bodies, a market that currently imports 23,000 tonnes annually.
The expansion is being executed in three phases, with the first phase completed in June and the final phase expected to conclude late next year.
The increased use of recycled materials is also expected to reduce costs and support the group’s sustainability initiatives.
Gounder reiterated Hulamin’s commitment to reducing net debt, maintaining stable plant performance, and effectively managing working capital as it moves into the second half of the financial year.
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