JSE-listed Metair expects to report a 24.6% year-on-year increase in headline earnings a share for the year ended December 31, while earnings a share are likely to be between 21.6% and 25.5% higher year-on-year.
“The automotive component vertical recovered after a difficult 2016, returning to satisfactory profitability after the disruption of the new vehicle launch. Trading for the period, therefore, sustained the progressive improvement in performance from the second half of 2016,” Metair said in a trading statement on Tuesday.
The company expects to see mid-single-digit full year turnover growth, and to achieve profit before interest and tax (PBIT) margins of about 10% for the full year.
Metair maintained its medium-term guidance that the achievement of targeted production volumes and efficiencies associated with the new technology and stabilisation of manufacturing processes should result in medium-term PBIT margins on new business of between 7% and 9%.
The company’s energy storage vertical has seen traditionally strong seasonal volume demand in the winter markets served by Rombat and Mutlu Akü in Europe and the Middle East, supported by a strong performance from Mutlu Akü, partially offsetting the impact of depreciating foreign currencies and higher lead prices.
Despite the negative impact of currency translation, the energy storage vertical is expected to achieve an improvement in PBIT of about 6%, with margins remaining stable at around 9.5%.
Metair’s Turkish battery business experienced record production for the year on the back of excellent fourth-quarter demand. The exceptional operating performance was, however, muted by the weak Turkish lira as a result of political uncertainty.
Metair’s South African operation, First National Battery, improved its performance in the face of increased competition after corrective action progressed as planned.
The company will announce its financial results on March 15.