Hulamin reported strong interim results to June 2017, with headline earnings per share up 17% as operating profit rose 11% despite a stronger rand.
The aluminium maker’s rolled products volumes were up 8% to an annualised 221,000 tonnes, as unit costs fell 8%. This came as aluminium prices rose further in the period after lows in late 2015 and early 2016.
"Hulamin has delivered a strong manufacturing performance and improved financial results, despite difficult market conditions and the rand being 14% stronger compared with the corresponding period in 2016," the group’s CEO, Richard Jacob, said on Monday.
Despite a fall in overall manufacturing, Hulamin increased its domestic beverage can packaging volumes 133%. This came as major customer Nampak’s volumes grew in the six months to March 2017.
Jacob said Hulamin had benefited from actions to enhance its product mix and improve market positioning. There had also been concerns among customers in the US that imports from China were likely to be controlled or curtailed.
Under the Donald Trump administration there is strategic concern that the US is over-reliant on aluminium from China, which has been accused by the US of dumping aluminium on world markets.
This has benefited Hulamin’s sales in the US, where it has a reputation for making high-quality products.
Most recently, Hulamin has been providing aluminium to enable onboard Wi-Fi for commercial airlines. It has also provided electric vehicle maker Tesla with specialised aluminium for the past three years.
Evan Walker, portfolio manager at 36One Asset Management, said that if the rand had not moved against Hulamin its result would have been "significantly better".
Hulamin was a net exporter and the company benefited from a weaker rand.
Meanwhile, Jacob said there would be a two-week shutdown of a number of the group’s production lines during the second half of the year for routine upgrades.