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Johannesburg - Semi-fabricated aluminium maker Hulamin [JSE:HLM] expects an improvement in the second half after first-half profit came in flat as a stronger rand offset higher sales volume.
"The start of the third quarter has been reasonably encouraging as far as volumes are concerned. If this continues we are expecting to have a better second half," CEO Richard Jacob told reporters during a conference call.
Aluminium consumption plummeted last year as economies around the world fell into recession, but demand is expected to recover as the global economy continues to rebound.
Hulamin, Africa's biggest maker of semi-fabricated aluminium, said on Monday headline earnings per share for the six months to end-June totalled 11c from 10c a year earlier, after taking into account the impact of a rights issue.
The company said sales volumes increased 32% to 94 000 tonnes but the stronger rand offset this. A strong rand is negative for South Africa's exporters because it eats into earnings when overseas revenue is brought home.
Exports were also limited by a transport strike in May that sparked port congestion, the company said.
The company said it had raised R750m through a rights offer to repay debt.
Hulamin said it was in talks with BHP Billiton and other firms about procuring rolling slab after June 2011.
BHP Billiton has said it will halt the supply of rolling slab, which is used to make aluminium sheets and foil products, at the end of 2010.
Hulamin also said upward cost pressures persist, particularly in energy, labour and the start-up costs of its new plant capacity, but the business outlook remained positive on firm market demand.
The company did not declare an interim dividend but would look into it at the end of the second half, Jacob said.
Shares of Hulamin, which are down nearly 13% so far this year, were flat at R10.40 as of 09:19 GMT, while Johannesburg's All-Share index firmed 0.3%.
- Reuters
