Hulamin’s operational profit augments Y-o-Y to score at R538 million, thanks to higher sales volume

Hulamin’s operational profit for the year ending December 31, 2021, reflected an increment of 760 percent to close at R538 million from R81 million in 2020. The company's headline earnings increased to R560 million from a loss of R220 million the previous year. The company also said that headline profits per share heightened by 187 percent to 182 cents from a loss of 94 cents in 2020.

Hulamin is a Pietermaritzburg-based South African firm that specialises in rolled aluminium products for precision and high-tech applications. The firm manufactures a large percentage of the world's ultra-high-end aluminium goods.

The sales volume also climbed by 34 percent to 222,000 tonnes, revenue had gone up by 52 percent to R13 billion, free cash flow from operations expanded by 166 percent to R239 million, and basic profits per share jumped by 347 percent to R1.92 cents.  EBITDA (earnings before interest, taxes, depreciation, and amortisation) grew by 254 percent when adjusted for the metal price lag (MPL).

According to the company, “The realisation of higher prices, ongoing cost controls, and metal price lag profits earned contributed measurably to performance. Cash remained tight throughout the year as a result of higher rand London Metal Exchange (LME) aluminium price absorption into working capital.”

“Increases in the LME price of aluminium will likely constrain the balance sheet and could constrain volumes should further increases occur. This risk is heightened by the energy crisis and aluminium supply constraints arising from the Ukraine conflict. Hulamin responded to the tough trading conditions of 2019 and 2020, returning to profitability in 2021. Contributors to this return to profitability include increased volumes, higher realised prices, and growth in local sales. The (LME) aluminium price contributed measurably, further boosted by utilisation of assessed losses” said Richard Jacob, Hulamin's CEO.

The increase in beverage can consumption and the implementation of import levies on aluminium flat-rolled products entering South Africa, according to Jacob, drove local sales up by 65 percent. The company stated that its core business condition has significantly improved.

“Following the completion of its turnaround plans in 2020, Hulamin Extrusions performed well in 2021, generating profits for the year, which included the proceeds of the sale of the Olifantsfontein property,” added Richard Jacob.