Hulamin expects ‘significantly higher’ earnings

HULAMIN said in a revised trading statement that it will see significantly higher earnings per share (EPS) and headline earnings per share (HEPS) for the year to end-December.

The aluminium manufacturer said on Tuesday it had earlier expected a more than 20% improvement from the year-earlier period, but now expected EPS, HEPS and normalised EPS of between 110c and 121c, 112c and 123c and 109c and 120c, respectively.

The range of increase across the board was between 73% and 129%. The latest forecast had not been reviewed and reported on by the company’s external auditors.

Hulamin reported a loss per share of 422c last year after taking account of a net impairment charge of R1.5bn, or 479c per share.

The group said on Tuesday it could not comment further on the "significant jump" reported in the revised trading statement before the release of its annual results expected on February 23.

But it said the carrying value of plant and equipment was impaired by R2.1bn last year to "align the carrying, or book, value with its value in use" as required by international accounting standards.

"There was a corresponding deferred tax adjustment that reduced the net impact of the charge on the 2013 income statement to R1.5bn," Hulamin acting CEO and chief financial officer David Austin said on Tuesday.

The 40% stake Hulamin now held in Isizinda Aluminium was "not expected to be material" on the Pietermaritzburg-based group’s bottom line, he said.

Isizinda is a broad-based black economic empowerment vehicle that is buying BHP Billiton’s Bayside aluminium casthouse in the Richards Bay Industrial Development Zone for an undisclosed sum.

The acquisition, which is still subject to conditions precedent, will be funded using internal Isizinda resources. The transaction is based on a slab offtake agreement between Hulamin and Isizinda worth more than R10bn over five years.