Beverage can and other aluminium products maker Hulamin more than doubled its aftertax profit on record sales volumes in 2016, it reported on Monday morning.
CEO Richard Jacob said that unlike in the year-earlier period, when Hulamin was hit by the double whammy of unreliable electricity supply from Eskom and gas supply problems, the group managed to achieve record production and sales volumes during 2016.
After paying no dividend in 2015, Hulamin declared a final dividend of 15c, which together with an 8c interim dividend took its total for the year to end-December to 23c. In its 2014 financial year, Hulamin paid a 25c dividend.
Monday’s results statement said the group’s turnover grew 20% to R10bn and its aftertax profit 135% to R385m.
Rising aluminium prices helped Hulamin book a "metal price lag profit" of R50m from a R161m loss in 2015 when aluminium prices fell. Group sales volumes for 2016 increased 17% to 232,000 tonnes.
"Local demand for beverage can stock products started the year under pressure and recovered somewhat in the second half to end the year at a similar level to 2015," Jacob said.
"The increased demand for can stock in the second half allowed us to source additional volumes of scrap. Now that the recycling facility is fully commissioned and contributing to overall business performance, albeit ramping up to full capacity in conjunction with the growth in sales of can body stock, we are increasing our activities in sourcing all forms of scrap."
Hulamin’s rolled products division was the main contributor to its record results, growing sales volumes 19% to 214,000 tonnes. Rolled products manufacturing conversion costs per tonne were down 10.7% in real terms.
Clients of Hulamin’s aluminium car parts include Elon Musk’s US electric car company Tesla.
Hulamin said operational performance at its Isizinda cast house continued to improve.
Its extrusions division also improved its performance following a capital investment plan to reposition it in "the very dynamic local market".