Shareholders in Hulamin shrugged off the aluminium group’s drop in profit in its latest annual results as they were upbeat about its increase in normalised headline earnings per share (Heps) and growth in revenue.
By 13.30pm, the company’s share price was up 6.4% to R2.82 as normalised Heps jumped 28.1% to R1.05 for the year to end-December.
“Pricing was increased to offset commodity pricing and inflation. This, together with a weaker exchange rate and a stable cost base, saw normalised headline earnings per share increase,” interim CEO Geoff Watson said.
“Hulamin is also benefiting from a more stable plant performance, 2023 has accordingly started positively,” he added.
The Pietermaritzburg-based company calculates normalised Heps by excluding the metal price lag, the timing difference between purchase and selling price of metal, and seasonal income or expenses.
There was an R26m loss from the metal price lag in 2022 versus a R425.9m gain in the 2021 financial year.
Hulamin buys primary aluminium and supplies a range of high-value, niche rolled products and complex extrusions worldwide.
The higher sales helped to lift its gross profit 15.3% to R1.89bn, but its operating profit was slightly lower at R530.1m. Net profit nearly halved to R299.7m and headline earnings dropped 45.5% to R305.3m.
Its net cash flow from operating activities fell more than three-quarters to R60.2m and its free cash flow went from R141.2m in the black to R162.7m in the red.
Revenue rose just over one-fifth to R15.93bn despite sales volumes declining 4.6% to 211,328 tonnes.
“The 2023 year has commenced with solid customer demand, particularly in the local and export beverage can markets, stable product margins and a weaker exchange rate,” Watson said.
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