R/€ = 15.16Change: -0.03
R/$ = 13.35Change: -0.02
Au 1156.06 $/ozChange: -2.88
Pt 981.00 $/ozChange: 2.00
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?

And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters About Us
RSS Feed
Article   Comments   Other News   Research   Magazine  
Feb 20, 2012

Hulamin headline earnings up 7%, sales volumes rise

© Reuse this

JSE-listed aluminium products producer Hulamin on Monday reported a 7% increase in headline earnings to R80-million, while its turnover for the 2011 financial year ended December 31, was up by 20%, at R6.96-billion.

Operating profit, before the metal price lag effect, increased by 19% to R204-million, despite additional liquid petroleum gas (LPG) costs of R13-million and the cost of closing the Cape Town extrusion plant of R7-million. The operating profit after the metal price lag effect declined by 22% to R170-million.

The company’s improved performance was owing to the strong performances in both Hulamin Rolled Products and Hulamin Extrusions, with the rolled products sales volume increasing by 11%, to 208 000 t.

"We are pleased that our operating performance continued to improve with increased sales volumes, better margins per ton and unit costs maintained at 2010 levels. This was achieved despite substantial increases in energy prices and disruptions in the supply of LPG,” CEO Richard Jacob said in a statement.

LPG supply disruptions, as a result of problems at the Sapref refinery in Durban, resulted in five days of lost production in the second half of the year, while procuring replacement LPG supply at short notice through imports increased costs.

Margins improved by 3.5%, while unit costs were maintained at similar levels to 2010.

Operational performance improvements from the manufacturing excellence programme resulted in increased production volumes, record yields, streamlined logistics, improved working capital efficiency and savings in the year of R142-million.

Given the volatile nature of the London Metals Exchange aluminium price, Hulamin retained its 50% hedge of the dollar value of its aluminium inventory pool. The impact of the fall of the aluminium price in the second half of the year resulted in a loss of R34-million on the value of the company’s metal inventories, compared with a profit of R46-million in 2010.

Hulamin Extrusions also performed well in a depressed market, increasing sales by 14%. The rightsizing of manufacturing capacity was reported to be delivering reduced operating costs and improved efficiencies.

Meanwhile, imports of low-priced aluminium products from protected markets continued to disrupt the domestic market, with domestic demand for rolled products remaining flat, while extrusion volumes increased by 14%, the latter driven by the closure of a significant competitor in November 2010.

“It is disappointing that import duties remain at 5% on extruded products and 0% on rolled products. Demand in international markets outside Europe was stable in the year, although still substantially off the pre-2008 highs. Demand in Europe was relatively strong at the start of 2011, but softened continuously thereafter, as the sovereign debt crisis affected confidence throughout the eurozone and customers consequently reduced inventories,” the company said.

Sales of automotive products were the most affected by this.

Hulamin said it had improved sales in all its high-value product markets, with can end and heat-treated plate sales growing by 9% and 19% respectively during the year. Operating cost pressure is expected to continue, most notably from rising energy prices and wage inflation, with the consequent impact on profits exacerbated by the continued relative strength of the rand.

Further, the company produces rolling slab and extrusion billet in its own facilities in Pietermaritzburg. Additional rolling slab is bought from the Bayside smelter in Richards Bay, on supply contracts, which had previously been long term, and which have, since 2009, been limited to six and twelve months.

The current supply agreement is secured to December 2012, while discussions to secure a sustainable rolling slab supply are ongoing. To supplement local supply and internal manufacture, Hulamin imports rolling slab and extrusion billet from sources in Australia and the Middle East.

European markets are expected to remain weak, while the US economy appears to be strengthening, and other markets appear likely to continue the improving trend experienced in 2011.

“As a result, Hulamin’s order book is in good shape, with current orders at similar, or better margins than those in 2011.

“Hulamin continues to focus on improving its operational performance through improved efficiencies, cost competitiveness and full-capacity use. The manufacturing excellence programme is expected to continue to deliver improved operational performance,” Jacob said.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
Other Manufacturing News
Outgoing Seifsa president Ufikile Khumalo
Downscaling by South African primary steel producers was “unavoidable” despite recent protection measures, outgoing Steel and Engineering Industries Federation of Southern Africa (Seifsa) president Ufikile Khumalo cautioned on Friday. Khumalo is also chairperson of...
INVERTED CULVERTS Rocla supplied several inverted culverts for use in cooling channels at a power station in Mozambique
Precast concrete products company Rocla earlier this year supplied precast concrete inverted culverts, lids and bases to use as cooling channels to the R2.24-billion, 100 MW natural gas-fired Gigawatt power station, near Ressano Garcia, in Mozambique.
PROPOSED SCHEME The Lower Thukela bulk water supply scheme will include a 55 Mℓ/d water treatment plant and a high-lift pumpstation at the water-treatment works
Engineering, management and specialist technical services firm Aurecon has undertaken two desalination plant feasibility studies for South African water utilities, following the successful completion of technical studies and investigations, construction-phase...
Latest News
South African Airways (SAA) has enhanced its partnership with the airline’s in-flight duty-free concessionaire Tourvest Inflight Retail Services (TIRS), enabling Voyager members to earn miles when buying duty-free products and spend their miles when shopping for...
South Africa's new visa regulations are having an adverse impact on the country's tourism industry without proof that they are making any impact on child trafficking, according to Hussein Dabbas, International Air Traffic Association (Iata) regional vice-president...
The Council for Scientific and Industrial Research (CSIR) has developed a semi-autonomous solution for early pothole detection to potentially replace the often time-consuming expensive manual road inspection. Showcasing the Visual Surveying Platform (VSP), CSIR...
Recent Research Reports
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
This Week's Magazine
BUSINESS LEADERS PANEL Adam Craker, Ivor Chipkin, Alan Hosking and Allon Raiz at the 6th IQ Business Active Growth conference
At the sixth IQ Business conference held in Sandton last month, a panel of business leaders and academics advocated that business reclaims the initiative to spur growth in South Africa amid fragmented and haphazard political direction. Management consulting firm IQ...
The building industry is an essential component of the South African economy as it contributes about 15% to the gross fixed investment that drives the economy. However, with the country’s economy going through a tough time currently, this, in turn, reflects on the...
The recipients of the 2015 South African National Energy Association (Sanea)/South African National Energy Development Institute Energy (Sanedi) Awards were announced at a ceremony and banquet in Sandton last month. Sanea chairperson Brian Statham named Exxaro CEO...
ASHER BOHBOT EOH’s corporate goals were originally aspirations, but the company is relevant and is making a difference in the territories it operates in
As South African information technology (IT) firm EOH posted another full year of strong growth, CEO Asher Bohbot, known for his frank words, people-centric management style and stoic humanism, attributed the company’s continued South African and African growth to...
International heavy-equipment engine manufacturer Cummins’ regional distribution centre (RDC) in Woodmead, Gauteng, has halved the average logistics distribution time for clients in Southern Africa and allowed for critical or long-lead stock to be kept closer to...
Alert Close
Embed Code Close
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96