Automotive, industrial and electronic consumables importer Hudaco Industries has hit out at the government’s failure to repair crumbling infrastructure, create jobs and tackle rampant corruption, and for its stance on the war in Ukraine.
“So much more could be achieved if only [the] government were effective and would act in the best interests of the country and its citizens,” the company, valued at about R4.8bn on the JSE, said in its results for the six months to end-May.
“Added to this is the growing concern related to the government’s foreign policy, which has contributed to significant depreciation of the rand and compromised key international relationships,” it added.
SA has come under fire for its neutral stance on the war in Ukraine as the West threatened to impose sanctions if it does not condemn Russia’s invasion.
Earlier this week, Moscow also warned SA that secondary sanctions may also be imposed for its nonaligned stance on the war, echoing similar warnings by the SA Reserve Bank that it might become impossible to finance any trade or investment flows or to make or receive any payments from correspondent banks in the US dollar.
Secondary sanctions are applied to those countries that transact with the country subject to primary sanctions — in this case Russia.
SA has called for a peaceful resolution and a cessation of hostilities, leading to the US warning that it might remove SA as one of the countries eligible for the benefits under the African Growth and Opportunity Act (Agoa), which gives African countries duty-free access to US markets for certain goods.
Hudaco Industries said if this happens, it would put 180 jobs at risk at its Gear Pump Manufacturing (GPM) business in Cape Town, which manufactures gear pumps for local and international markets.
“While not a needle mover for Hudaco, GPM has made great strides in growing its sales of locally manufactured gear pumps into the American market,” the company said.
Hudaco was founded in 1891 shortly after the discovery of gold on the Witwatersrand and distributed mechanical and electrical industrial products before listing on the JSE in 1938. Hudaco Industries was listed as a separate company on the local bourse in 1985.
The group has diversified over the years to reduce its reliance on mining and manufacturing as these industries have slowly contracted in SA.
In its latest results, it upped its interim dividend 8.3% year on year to 325c, amounting to a payout of R196m, while net profit grew 0.3% to R293m.
Revenue lifted more than one-tenth to R4.25bn while operating profit, generated from a company’s core operations, improved 2.8% to R465m as severe load-shedding hurt its operating profit margin.
Headline earnings per share, a common profit measure in SA that excludes certain items, improved 8.1% to 926c, helped by the decrease in the number of shares as the company bought back R112m in shares.
With Thando Maeko
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