On Monday, March 17, Hulamin, a South African company specialised in producing rolled and extruded aluminium products, reported bearish annual earnings that ended December 31 2024, alleging operational challenges as a primary cause for constraint.
According to Hulamin CEO Meganathan Gounder, operational challenges and persistent pricing pressure in certain streams, such as export can stock and standards, offset the earnings improvement despite robust demand in the local market, particularly for can body.
He said in a statement, "The 2024 financial year began with promise as market conditions showed significant improvement, particularly in the export segments. Demand recovery brought renewed opportunities, although pricing pressures in certain streams, such as export can stock and standards, persisted. Locally, demand remained robust, with strong momentum for Can Body."
Financial and operational performances at a glance
Hulamin reported a 22 per cent Y-o-Y decline in normalised operating profit to R378 million (USD 21 million) despite robust local sales volumes accounting for 55 per cent of the group's total sales of 173,167 tonnes, driven by record can body and plate sales.
In the year under review, Hulamin sold 51,587 tonnes of can body products and 31,040 tonnes of plates to the local market, compared to 38,274 tonnes and 24,393 tonnes of sales in 2023.
Net profit attributable to shareholders amounted to R246 million (USD 13.6 million) in 2024, down by 9.23 per cent from R271 million (USD 15 million) in 2023. Earnings before interest, tax, depreciation, and amortisation (EBITDA) also decreased by 12 per cent to R344 million (USD 19 million), compared to R486 million (USD 26.84 million) in the previous year.
The basic normalised headline profit per share emerged at 42 cents at the end of 2024, reflecting a 45 per cent downfall from 77 cents in 2023.
Net debt was R1.3 billion (USD 72 million) at the end of December 31, 2024.
Chairman Thabo Leeu said, "The anticipated transaction is expected to unlock working capital, enabling Rolled Products to simplify its foil product mix and prioritise the higher-margin export foil segment."
Subdued operations and fire incidents at the can-end finishing line, affecting 8,000 tonnes of higher-margin export can end and tab, particularly caused hindrance to capitalise on demand recovery in the second half of 2024. The company's CEO said they would focus on executing the five-year strategy, including completing the final phase of the Wide Can Body plant upgrade. The first production at the plant is expected to happen in the fourth quarter of 2024. Other priorities include better scrap utilisation from the current rate of 22 per cent and reducing working capital and net debt.
The investment in wide can-body manufacturing is aimed at balancing the 23,000 tonnes of imports into South Africa annually. The group is adding 15,000 tonnes of widebody can line in South Africa.
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