South African Aluminium supplier and exporter HULAMIN sends warning signal of loss due to high fixed costs
South African Aluminium supplier and exporter Hulamin, whose customers include Tesla, has sent warning signal on 19th June’20 that it has entered into a loss in its year to end-December. The company had already stated earlier that declining sales took a chunk out of its profits of a business classified by fixed costs.
The group announced that it expected to report a headline loss per share of between 70c and 80c, and up to 187.9% decline from the prior comparative period.
Hulamin declared previously: “They experienced unusually challenging conditions in 2019, amid weak market conditions both locally and internationally.”
This resulted in Hulamin Rolled Products sales volumes declining 10% to 204,000 tonnes.
The group said in a trading update in March. “Due to the high fixed manufacturing cost base of the business, the impact on operating profit of this sharp reduction in volume has been severe.”
The group has said previously it also saw production disruptions during the period and had made write-downs related to deteriorating market conditions. Aluminium prices were under pressure in 2019, amid slowing demand in China.
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