Aluminium products-maker Hulamin more than doubled its headline earnings in the first half of its 2022 year as it benefited from growing demand.
Basic headline earnings per share (Heps), a widely used measure of profit that strips out impairments and one-off items, is up 147% to 47c in the period to end-June. Revenue increased by 45% to R7.9bn and operating profit more than doubled to R223m.
“Despite the global impact of the war in the Ukraine on shipping rates, the impact of commodity prices and general inflation on Hulamin’s productions costs, Hulamin has managed to mitigate these by optimising on product sales mix and negotiating pricing to mitigate these cost increases to maintain margins,” the company said on Monday.
The R843m company based in Pietermaritzburg buys primary aluminium and supplies a range of high-value, niche rolled products and complex extrusions. Aluminium rolling, the uses of which includes cans, accounts for most of its revenue.
Hulamin has been benefiting from growing global can demand over the past two to three years, while in SA, demand has also been boosted by a glass shortage.
The 2022 financial year started with solid demand, firmer prices than in recent years and a weaker rand-dollar exchange rate, said CEO Richard Jacob, who will retire at end-September after 12 years at the helm.
Jacob joined Hulamin more than three decades ago. Independent non-executive board member Geoff Watson will serve as interim CEO as the company looks for a replacement.
Aluminium prices have fluctuated in 2022 as the London Metal Exchange aluminium price was $2,815 per ton at the start of the year before reaching a high of $3,850 and closing on $2,396 at the end of Hulamin’s reporting period.
“That is China related, and lockdowns there, so demand has dropped. But there is a significant shortage of the metal globally, and as soon as China starts to pick up demand again I would expect aluminium prices will rise again,” Watson told Financial Mail earlier this month.
The group’s shares have, however, come under pressure in 2022, having fallen 42.2% year to date. On June 6, its share crashed more than a quarter, its worst day since listing in 2007, after a potential suitor pulled out of a deal to buy the business.
SA is its biggest market, accounting for just less than half of its revenue, followed by North America (24.4%), Europe (21.5%) and Australasia (2.1%).
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.