Metair says its offshore bets paid off in 2018
Strong showing from businesses in Turkey and Romania helps full-year net profit rise 19%
Metair Investments said net profit in the year ended December 2018 rose 19% to R699m despite the “particularly turbulent, challenging and transformative year” for SA companies in general.
“The year saw a strong contribution from our overseas acquisitions in the energy storage vertical, particularly Mutlu Aku in Turkey, which managed to outperform the Turkish lira currency weakness for a fifth year in a row, and Rombat in Romania, which operated at full capacity in the second half,” Metair said.
The group said its automotive components business in SA “supported the result with good volume throughput”.
Group revenue increased 8% to R10.3bn while margins grew 90 basis points to 9.8%.
Metair said while most SA companies had reported poor performances from their overseas operations, the in-country performance of Mutlu Aku “continued to be resilient”. That business contributed a 27% increase in turnover and 55% increase in profitability.
Metair, headed by Theo Loock, said its plans to target 10% of global battery production were dealt a blow when a major foreign acquisition was scuppered due to difficult market conditions and a lack of shareholder support for the deal.
The group said uncertainty and labour volatility in SA and Turkey would continue in the short term, and the wage-negotiation processes in both countries would be “challenging under these circumstances”.
Conditions for the automotive component business were likely to be favourable thanks to the increased stability and certainty created by the extension of government incentives in SA.
“Vehicle exports are expected to reach record levels,” it said.
Metair said current market conditions made it tougher to sell its spare lead acid battery capacity.
“The group will therefore focus more on expanding our aftermarket lead acid battery export customer base, including production of customer-branded aftermarket product requirements,” it said.
It also aimed to improve the performance of First National Battery in SA.
“Should conditions in Turkey remain stable and exchange rate volatility stabilise, another strong performance by Mutlu Aku would deliver real growth in rands, rather than offsetting depreciation in the currency as it has to date,” Metair said.