JSE-listed energy storage and automotive components manufacturer Metair advises that its earnings per share (EPS) and headline earnings per share (HEPS) for the financial year ended December 31 will be at least 105% and 104% lower, respectively.
EPS and HEPs will, therefore, be at least 369c lower than the EPS and HEPS of 350c and 354c, respectively, reported for the 2021 financial year.
The company attributes the lower earnings first and foremost to a noncash impact of applying hyperinflation accounting at its Turkish operations, which impacts on the earnings of its battery business Mutlu Akü.
The company also experienced the knock-on impacts of supply chain disruptions and had to incur higher costs owing to the use of premium air freight.
Moreover, Metair explains that its earnings were impacted by the planned pre-production and engineering cash costs in respect of the automotive components vertical, most notably at Hesto Harnesses, in relation to the new Ford Ranger project launched in November last year.
Metair also suffered knock-on impacts from its major customer Toyota South Africa Motors, which experienced major flooding at its production facility on the KwaZulu-Natal coast in the period under review
Earnings were also impacted by increased interest charges as a result of high net debt levels to support new projects and to mitigate supply chain disruptions.
Meanwhile, Metair says its automotive components vertical continues to benefit from growth in original-equipment manufacturer (OEM) volumes.
Within the energy storage vertical, volumes remain above pre-Covid-19 levels, driven by strong OEM demand.
The company affirms that none of its facilities in Türkiye have been impacted following recent earthquakes in that country; however, some of its dealers have been impacted. Metair is assessing what the impact of the natural disaster will be on the aftermarket business.
Metair will publish its results for the 2022 financial year on or about March 30.