Hulamin sees a 19% drop in H1 earnings due to poor export market; positive domestic demand drives expansion projects

Amid this subdued fiscal outcome, Hulamin reported strong aluminium demand in the local market, up by 8 per cent, helping to offset weaker export market demand. CEO Mark Gounder said Hulamin would continue experiencing pressure on export volume because of poor demand conditions in regions like the European Union.

Hulamin said it spent R302 million on capital investments in H1 2024. Reportedly, the company is taking several strides to enhance its operational framework, such as increasing the use of aluminium scrap and reducing production costs, to position itself for future success.

Mark Gounder further noted that although Hulamin’s financial performance reflected an annually weaker outcome, it substantially improved from the second half of 2023. From EBITDA of 195 million in H2 2023, it grew to R343 million in H1 2024.

The extrusion sales volume was down by 15 per cent Y-o-Y in H1 2024, attributed to decreased automotive production volume and market challenges.

“The recovery in our export market segment has had a temporary setback following a fire outbreak in the coil coating line, which impacted the export can end and tab markets. Management’s focus is on optimising the available plant capacity towards higher margin products and a comprehensive focus on cost curtailment in line with the reduction in volumes. Progress on the repair work to the coating line is on schedule with resumed production expected by mid-September,” Mark Gounder added.

Business expansion strategy

Hulamin is investing capital to expand production in line with the growing consumption trend. Currently, aluminium can consumption in South Africa is growing by 5 per cent Y-o-Y. Hulamin has identified a potential market opportunity by finding that about 23,000 tonnes of wide-can body products are imported annually. Hence, Hulamin is contemplating installing a 15,000-tonne capacity wide-body can line in South Africa.