Metair, an international manufacturer, distributor and retailer of auto components and energy storage solutions, grew revenue a robust 51 percent to R5.9 billion in the interim period after the execution on strategy and the market recovered from the Covid-19 fall-out. Photo: Supplied
METAIR, an international manufacturer, distributor and retailer of auto components and energy storage solutions, grew revenue a robust 51 percent to R5.9 billion in the interim period after the execution on strategy and the market recovered from the Covid-19 fall-out.
This after stringent lockdown measures in South Africa, Turkey and Europe in the first half of last year. Group operating profit rose to R545 million from an R18m loss.
However, chief executive Riaz Haffejee said in an interview that the broken global logistics supply chain of last year was still a challenge, although the group was adapting to the changes. For instance, container costs were three to four times what they had been previously, many ports and terminals were “jammed and in disarray”, and there were stop-start production delays from other component and raw material suppliers. He hoped the situation would improve by end of the year.
Despite this, earnings of R701m before interest, tax, depreciation and amortisation were sharply up from R139m in the prior comparative period, and headline earnings per share recovered to 170 cents, from a loss of 56c.
“Our teams have done an excellent job in executing our Covid-19 response strategy to ensure operations recovered to benefit from higher demand, and that we continued to deliver on customer commitments by adapting to manage the significant supply chain disruptions experienced during the period.” He said the group’s investment projects remained on track.
The automotive components vertical, which was dependent on South African OEM (original equipment manufacturer) production, was positively impacted by model launches, facelifts and the general market recovery. OEM production volumes increased 54 percent, buoyed by higher export demand for locally produced vehicles, resulting in an 88 percent lift in contribution to group revenue to R3.5bn. Operating profit improved to R254m from a R48m loss. The energy storage vertical increased its automotive sales volumes 42 percent to 3 961 000 units, supported by strong local after-market, OEM and export demand across all regions.
Chief financial officer Sjoerd Dowenga said there had been a change in the way people use their vehicles in the US and European markets where the group operates as pandemic restrictions eased. People were using their vehicles more irregularly, and also shifting away from public transport — high fluctuating temperatures and irregular use shortens energy storage life.
The V-shaped recovery in the energy storage vertical was largely driven by improved export volumes from Mutlu Akü in Turkey. The vertical contributed a 32 percent increase in revenue to R3.3bn, while operating profit rose to R328m from R74m.
Cash and its equivalents ended the period at R1.1bn. Net finance charges fell 30 percent to R64m because of a reduction in interest rates and lower average debt levels for the period.
Haffejee said cash preservation and liquidity management would continue to be a focus. A total of R1.6bn in capital expenditure had been approved for the year in support of new project launches in automotive components and technology in energy storage.
Metair shares closed 3.42 percent lower at R24.55 on the JSE yesterday.
edward.west@inl.co.za
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