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Johannesburg - Hulamin [JSE:HLM], Africa's leading producer of semi-finished and fabricated aluminium products, has reported a 167% improvement in headline earnings to R71m for the half-year ended 20 June 2011, which it said had been achieved off a low base.
Hulamin CEO Richard Jacob commented: "We continued to improve operational performance in the first half. As a manufacturing exporter, much of these improvements were offset by the strengthening rand. We are cautious about prospects for the second half, with the current local supply and sales disruptions, and markets in Europe and the USA weakening. We remain on track though to continue our performance improvements."
The group said its improving operational performance had continued in the first half of 2011, resulting in increased production and therefore sales volumes, as well as reduced unit costs.
Sales of rolled products for the first half of 2011 saw an increase of 22% to 208 000 tons annualised compared to 170 000 tons in the comparative period.
Rolling margins in dollars continued to improve driven by increases in both sales of high value products and market prices. Turnover grew to R3.4bn, an increase of 24% over the comparative period.
The rand continued to strengthen against the dollar and averaged R6.91 in the reporting period, 8% stronger than the average of R7.54 in the first half of 2010. The profit impact of this strengthening of the rand offset much of the operational improvements achieved.
"Hulamin's order book remains healthy as a result of solid demand. Local sales showed modest recovery, with the exception of the building and construction sector, which has continued to constrain sales of extrusions, as have ongoing low priced imports. Hulamin Extrusions is due to close the Cape Town extrusion plant at the end of September.
"The R75m project to increase rolling slab capacity in Pietermaritzburg was completed during the second quarter and is being ramped up to full capacity. Discussions continue withBHP Billiton [JSE:BIL] on the supply of rolling slab beyond June 2012," Hulamin said.
It added: "In the second half of 2011, prospects have been tempered by weaker demand in Europe and the USA, disruption of LP gas supply and the impact of the Seifsa strike at local customers."
Hulamin CEO Richard Jacob commented: "We continued to improve operational performance in the first half. As a manufacturing exporter, much of these improvements were offset by the strengthening rand. We are cautious about prospects for the second half, with the current local supply and sales disruptions, and markets in Europe and the USA weakening. We remain on track though to continue our performance improvements."
The group said its improving operational performance had continued in the first half of 2011, resulting in increased production and therefore sales volumes, as well as reduced unit costs.
Sales of rolled products for the first half of 2011 saw an increase of 22% to 208 000 tons annualised compared to 170 000 tons in the comparative period.
Rolling margins in dollars continued to improve driven by increases in both sales of high value products and market prices. Turnover grew to R3.4bn, an increase of 24% over the comparative period.
The rand continued to strengthen against the dollar and averaged R6.91 in the reporting period, 8% stronger than the average of R7.54 in the first half of 2010. The profit impact of this strengthening of the rand offset much of the operational improvements achieved.
"Hulamin's order book remains healthy as a result of solid demand. Local sales showed modest recovery, with the exception of the building and construction sector, which has continued to constrain sales of extrusions, as have ongoing low priced imports. Hulamin Extrusions is due to close the Cape Town extrusion plant at the end of September.
"The R75m project to increase rolling slab capacity in Pietermaritzburg was completed during the second quarter and is being ramped up to full capacity. Discussions continue withBHP Billiton [JSE:BIL] on the supply of rolling slab beyond June 2012," Hulamin said.
It added: "In the second half of 2011, prospects have been tempered by weaker demand in Europe and the USA, disruption of LP gas supply and the impact of the Seifsa strike at local customers."
