Automotive components manufacturer and battery maker Metair said on Wednesday it had so far received R150m in an insurance payout related to flood damage in KwaZulu-Natal, as it reported higher sales volumes in Turkey.
The company said it had lodged a business interruption claim and had received an interim cash payout of R150m. It did not give the full amount to be paid out.
“The insurance claim process is ongoing and envisaged to be completed during the second half of the year,” the company said.
“Metair continues to be in close contact with its funders to maintain sufficient short-term liquidity until the situation stabilises.”
While the impact of the floods on Metair’s facilities was minimal and operations had promptly returned to normal, a major Original Equipment Manufacturer (OEM) customer, Toyota, advised that it had suffered significant damage to its plant, with production suspended for clean-up operations and assessments.
Highlighting that the devastation at Toyota had affected its operations significantly, Metair said it had resulted in reduced demand in the 2022 second quarter, which had carried over into the third quarter.
Metair said subsidiaries are in a pre-production and prototype manufacturing phase for new model launches, and these and facelift launches are expected to drive growth over the medium to long term, most notably related to its contract to support Ford’s investment in the SA automotive industry.
But the Johannesburg-based global supplier cautioned that there is still some uncertainty around the timing of a return to normal production volumes.
Carmakers globally are still enduring supply chain issues, most notably a severe shortage of semiconductor chips.
The group warned that raw material shortages, as well as semiconductor chips, supply chain delays and, more recently, the loss of production in KwaZulu-Natal, meant there was a degree of uncertainty around the short-term volume outlook for the remainder of the year.
Metair said the company continued to invest in capital expenditure and had incurred project costs ahead of a new major Ford model launch in the fourth quarter.
The company said Energy Storage Vertical is “performing well relative to the operating environments in Turkey, Romania and SA and continues to deliver strong automotive battery volumes and revenues”.
Demand for energy storage is on the rise globally, and in SA the opportunities are sprouting for developed and new entrants into the market.
It said automotive volumes sold are expected to be about 4-million units, supported by strong volumes from Turkey as Mutlu Akü export volumes increased more than 40% in the period compared with the six-month period ended June 30 2021.
The Mutlu Akü subsidiary, which accounted for 31% of group turnover in the previous financial year, trades in batteries, solar backup, standby and charging systems.
Metair reported volumes from Romanian company Rombat, which it owns, are expected to be at least 10% lower, mainly due to lower consumer confidence from the ongoing Russia and Ukraine conflict.
Metair’s interim results are expected to be released on September 14.
The share price rose 1.64% to R25.97 on Wednesday.
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