Metair Investments expects an increase in earnings for the year to end-December, supported by the inclusion of Hesto Harnesses and improved performance in its original equipment manufacturing businesses, though a European regulatory fine and other one-off items will weigh on its results.
The automotive components and aftermarket group said on Monday that headline earnings per share (HEPS) from continuing operations, which exclude the Rombat fine, are expected to increase 76%-86% to 185c-195c.
The Rombat fine relates to a €20.2m (R413m) penalty imposed by the European Commission on Romanian battery manufacturer Rombat, in which Metair owns a majority stake.
Including the fine, Metair expects to report a headline loss per share of 18c-24c from continuing operations.
Group revenue for the year is expected to increase 53%-58% from R11.4bn previously, driven by the inclusion of Hesto from April 2025 and AutoZone for the full year. Earnings before interest and tax (ebit) are expected to rise by up to 103% to about R1.1bn, with margins improving to 6%-6.2%.
Metair said the improvement came despite mixed conditions in the automotive market. South Africa’s new vehicle sales rose 15.7% in 2025, but growth was largely driven by imported vehicles, while local original equipment manufacturer (OEM) production increased by only 1.48%.
The company said the OEM direct component manufacturing segment recorded the strongest growth, with revenue expected to rise 63%-68%, supported by cost-reduction initiatives, production discipline and the contribution from Hesto.
Results from the aftermarket parts and retail segment were weaker. Revenue is expected to increase 40%-44%, mainly due to AutoZone, but margins fell to about 4% as “AutoZone remained loss-making during its stabilisation phase and margins at First Battery South Africa returned to more normal levels”.
Metair said progress continued at AutoZone, though the business was still stabilising and running about six months behind plan.
The group also closed some operations during the year, including the industrial division of First Battery and Dynamics Batteries in the UK, as part of a “strategic refocus on the African market”.
Metair said its financial position improved after the completion of a capital restructuring in 2025, including the refinancing of R3.3bn of South African debt and R1.4bn linked to Hesto. Repayment terms were aligned more closely with expected cash flows.
All debt covenants were met during the year though high interest costs continued to weigh on results.
Metair said it continues to dispute the Rombat ruling and rejects the presumption that it exercised decisive influence over Rombat.
The company’s full-year results are expected to be published on March 11.
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