Hulamin invests in recycling

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Johannesburg - Shares in Hulamin gained yesterday after the aluminium producer posted solid annual results and announced a R300 million investment in a recycling facility as it plans to diversify its metal sources amid mounting concerns about supply from the Bayside smelter.

“This investment will allow Hulamin to secure competitively priced aluminium inputs and increase its slab production capacity in Pietermaritzburg,” chief executive Richard Jacob said.

Hulamin planned to make the most of a switch to the all-aluminium can, from the old steel-lined can. It expected local sales volumes to grow by 10 percent this year and beyond as production was switched to the all-aluminium can, to be completed by 2018 to 2020.

Hulamin aimed to source a quarter of its metal from scrap, and the R300m plant would allow the company to process scrap from street collectors to its distribution channels, he said. It planned to produce up to 200 000 tons of aluminium a year even if BHP Billiton’s Bayside smelter in Richards Bay closed, Jacob said.

Hulamin said BHP Billiton had committed to continue supplying it with rolling slab until year-end. BHP Billiton previously said it was talking to its employees about restructuring its Bayside operation.

This necessitated negotiations between the two over the future of rolling slab supply from the Bayside casthouse. Hulamin and BHP Billiton have been in discussions for several years over the longer term availability of rolling slab and other value-added smelter products from Bayside.

Hulamin posted a 101 percent increase in underlying profit to R375m, before metal price lag and impairments, in the year to December last year, the highest since 2008, it said. No dividend was declared.

Headline earnings rose by 132 percent to R183m, or 57c a share, as turnover increased 15.6 percent to R7.56 billion.

Normalised earnings, excluding a non-cash impairment charge of R1.53bn and once-off costs related to cutting the wokforce, increased 251 percent to R201m, or 63c a share. The company cut its workforce by 10 percent to 1 900 in the fourth quarter at a cost of R35m.

Hulamin closed 2.87 percent up at R6.45 after earlier rising as much as 6.5 percent. - Business Report


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