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Metair ups profit despite Hesto bleed, export losses

Image of Metair CEO Sjoerd Douwenga

Sjoerd Douwenga

15th September 2023

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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Despite the loss of the Russian battery export market, as well as the poor performance of wiring harness maker Hesto, Metair still managed to chalk up a healthy increase in profit for the six months ended June 30.

Operating profit for the period was up 124%, to R324-million, compared with the same period last year, while the company also saw a 31% rise in revenue, to R7.6-billion.

The increase in operating profit was owing to stronger South African vehicle production, which created higher demand for Metair’s products, as well as higher profitability from battery producer Mutlu, in Türkiye.

Vehicle production in South Africa rose by 11% during the period, to around 293 000 vehicles, with volumes at the group’s major customers showing a 21% improvement.

Metair is an international manufacturer, distributor and retailer of energy storage solutions and automotive components.

Incoming CEO Sjoerd Douwenga said this week that Hesto suffered a R711-million operating loss in the six months under review, with the company heavily affected by a sudden facelift to the Ford Ranger implemented by the auto maker in the second quarter.

Douwenga was, however, still pleased with the contract to supply Ford, as Metair went from zero business with the Pretoria-based plant to billions in revenue.

He expected Hesto to return to profitability in the second half of the financial year, owing to improved efficiency and product repricing.

Within Metair’s energy storage business, efforts were being made to replace a loss of 1.1-million units in battery exports to the US and Russia.

The European Union earlier this year implemented sanctions on the export of batteries to Russia, driven by this country’s invasion of the Ukraine.

Metair owns battery businesses in Romania and Türkiye.

Douwenga noted that the Metair team was hard at work to replace these export losses, while it was also focused on expanding its battery storage and solar system solution businesses.

He added that Metair was ready for the rollout of new-energy vehicles (NEVs), be it hybrids, battery electric vehicles or hydrogen vehicles.

“We expect a significant change in technology to hit us in the next two to three years, leading to 2030.”

Douwenga said he had “high confidence” in Metair’s ability to adapt along with local vehicle manufacturers, as well as in the fact that the group’s companies supplied mostly products that also featured in NEVs, such as wiring harnesses, lighting, plastic products and suspension systems.

He also believed that local vehicle plants were receiving sufficient warning from their parent companies before they migrated to NEVs, which should allow Metair a cushion period to gear up for whatever products these vehicles required.

“It has been a tough six months, but the outlook is really positive,” noted Douwenga.

He added that the group would revisit the 15 companies in its structure, in an effort to optimise and de-risk the business.

 

Edited by Creamer Media Reporter

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