Hulamin reports major disruption in operations as sales declined by 24%
DURBAN - HULAMIN said yesterday that the Covid-19 outbreak caused a major disruption in its operations as sales volumes declined by 24 percent to 166 000 tons in the year to end December.
However, the group said the London Metals Exchange price of aluminium, which mainly affects working capital and metal price lag, was stronger during the period, climbing to $2 018 (R29 375) a ton, up from $1 770 a ton a year earlier and the rand price of aluminium rose by 18 percent by the end of 2020.
But group turnover fell by 20 percent to R8.55 billion, while its headline loss improved to R210 million compared to R240m reported last year.
Chief executive Richard Jacob said the group faced strong headwinds during 2020 as local and export sales were impacted by Covid-19-related slowdowns across the local and global economies.
“Lockdown in South Africa and across the globe impacted sales of all products and resulted in the inability to operate until Hulamin Rolled Products was issued an ‘essential services’ certificate in mid-April. The lockdowndriven ban on alcohol sales in the local market further impaired sales of beverage can material in our largest market, South Africa,” Jacob said.
Hulamin managed to reduce its losses despite a difficult year, with headline loss improving by 10.5 percent to 68 cents a share compared to 76c and basic loss a share improved by 80.3 percent to 75c compared to last year’s loss of 380c.
The group also saw an improvement in its operations during the second half of the financial following the partial lifting of lockdown restrictions as all operations returned to operating profitability in the final quarter as volumes improved.
Jacob said another positive aspect during the year was that Hulamin Extrusions completed its turnaround plans following the closure of its Olifantsfontein site, which has subsequently been sold, the business has consolidated operations successfully in Pietermaritzburg and returned to profitability in the second half.
“Both Hulamin Rolled Products and Hulamin Extrusions are therefore focused on returning to full manufacturing volumes, although Hulamin Rolled Products will undertake a comprehensive maintenance shutdown during the first half of 2021,” he said.
Hulamin shares decreased 2.85 percent to close at R2.40 on the JSE yesterday.