Hulamin flags lower half-year earnings

Aluminium group Hulamin has told investors that its interim earnings for the six months ending in June would decrease by up to a fifth due to disruptions in export production caused by a factory fire in June.

This was compounded by weaker worldwide markets, which had affected the company’s export market sectors.

Headline earnings per share, the primary measure of profit that strips out certain one-off items, were expected to fall in a range of 13%-21% to as low as 75c in the half-year to end-June, the group said on Tuesday.

Hulamin buys primary aluminium and supplies a range of high-value, niche rolled products and complex extrusions, with aluminium rolling.

The group has been experiencing challenging trading conditions with softer global markets affecting demand, resulting in pricing pressure for common alloys, export can and plate products.

In March it reported profit after tax of R271.8m for the year to end-December from R299.7m a year earlier.

This week the group said that while softer global markets had persisted into the half-year, demand from export customers had started to recover during the latter part of the six months. It said that by the close of the interim period, demand from export customers had recovered to historical levels.

By contrast, Hulamin said the local market remained resilient.

The Pietermaritzburg-based industrial group said the fire on June 24 damaged its coil-coating line, which produces export can end and tab stock.

However, the JSE-listed group assured investors that it was comprehensively insured for both asset replacement and business interruption, with plant repairs expected to be completed by September 15.

In 2023 Hulamin said it had ditched unprofitable hot-rolled products in favour of their lucrative cold-rolled counterparts for the in-demand can market, as its simplification strategy gained traction.

The company is also brewing an expansion plan at one of its plants, which will see it increase its domestic cold-rolled volumes amid a ramp-up of its can offering.

Hulamin shares slipped 1.14% to R4.35, having risen 50% since the start of 2024.

gumedemi@businesslive.co.za