The share price of industrial metals and plastics manufacturer Insimbi surged on Tuesday after it said headline earnings per share (Heps) for the year to end-February will be more than double those of the previous year.
The company — which sources, processes, beneficiates and recycles metals — saw its shares rise as much as 10.4% to R1.16 in intraday trade, before settling just 1.9% higher at R1.07. The price remains 8.55% weaker since a month ago, but is still up 7% so far this year.
In a trading update Insimbi — which supplies alloys to the steel sector and ceramic refractory linings to the cement, paper and pulp, steel and platinum industries — told shareholders that Heps are expected to increase 23.5c-25.6c, representing an increase of 127% to 147% from last year.
The company, which listed on the JSE in 2008, did not divulge the driving factors behind the increase. A subset of the total profits reported by a business, Heps gives a measure of a company’s operational, trading, and capital investment activities, while excluding large one-off items.
The price of steel soared in 2021, with demand outpacing supply, which surged after the hard Covid-19 lockdowns as governments began to rebuild. Prices are, however, finally set to correct owing to weak seasonality, ratings agency Crisil said in its latest report.
Meanwhile, the jury is still out on whether a proposed ban on the export of scrap metals will prove effective in curbing the theft of metal that is then sold as scrap.
Most recent industry figures show that in 2019 SA shipped about 633,000 tonnes of scrap metal amounting to R5.6bn.
With the steel master plan conference expected to get under way on Thursday, industry players are waiting to see what direction the government will want to take with its policies to bolster the industry.
Insimbi is expected to release results for the 12 months ending February 28 on May 31.
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