Hulamin has delivered its second successive annual record sales and production despite the tough economy and stronger rand.
Rolled products made up most of this, improving the aluminium producer’s liquidity with strong cash flow of R296m in the year to December.
Comparable earnings were up 33%, in constant currency terms, on a strong operational performance. But headline earnings per share slumped 13% due to a stronger rand. However, a dividend of 15c per share was maintained.
The share dropped 3.92% to close at R4.90.
"We report another year of record sales and improved manufacturing performance following the previous record set in 2016," CEO Richard Jacob said on Monday.
"This was achieved through an ongoing focus on manufacturing excellence, with a specific emphasis on cost reduction and tight capital discipline.
"This resulted in a second consecutive year of strong cash flows and a further reduction in borrowings," he said.
So the group would have a tough year ahead as 75% of its products were exported. Jacob said every change of one rand in the rand-to-dollar exchange rate was worth a positive or negative R200m in earnings before interest and tax.
Hulamin was benefiting from growth in electric vehicle demand and also from aluminium beverage cans.
Sales of the latter shot up 49% in the year, as drinks packaging companies swapped from tinplate production lines.
In the face of cheaper aluminium imports from China, some import tariffs had been put in place. But Jacob said Hulamin relied on superior service levels, quicker lead times and the quality of its products.
Cratos Capital portfolio manager Ron Klipin said on Monday that despite strong operating conditions with record production and sales, the rand was up 10% against the dollar in the period. This had negatively affected Hulamin’s results.