Hulamin CEO Richard Jacob in the plant. Picture: FINANCIAL MAIL
Hulamin CEO Richard Jacob in the plant. Picture: FINANCIAL MAIL

Rising aluminium prices compensated for a stronger rand to help local manufacturer Hulamin grow profit on nearly flat revenue.

Hulamin reported its interim revenue for the six months to end-June grew 3% to R5.1bn while aftertax profit grew 17% to R178m.

The London Metal Exchange aluminium price rose to $1,900/tonne by the end of reporting period, 27% higher than lows of below $1,500/tonne that prevailed in late 2015 and early 2016.

Hulamin said that enabled it to book a "metal price lag profit" of R78m.

The average price of aluminium it paid in its interim period was 22% higher than in the matching period, helping to compensate for a 14% strengthening of the rand against the dollar.

Hulamin’s US customers include Elon Musk’s electric car maker Tesla for which it makes specialist parts out of aluminium.

"In the US, Hulamin’s heat treated plate continues to set quality and performance benchmarks. Over and above Hulamin’s niche automotive market in the US, our plate has been specified for two additional high-end applications: an aerospace wi-fi component and a high tolerance material handling application," CEO Richard Jacob said in the results statement.

"Market conditions in SA have remained depressed. However, despite the overall manufacturing economy declining, Hulamin increased its local beverage can packaging volumes by 133%, albeit from a relatively low base in the corresponding period, with a consequent increase in scrap purchases. "

Hulamin does not pay an interim dividend.

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