Insimbi Industrial’s share price soars following six months of strong earnings growth
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Insimbi Industrial Holdings saw its share price rise more than 11 percent yesterday morning after headline earnings per share increased 984 percent to 11.17 cents for the six months to August 31.
Insimbi, which sources, processes, beneficiates and recycles metals, said revenue jumped 48 percent, to R3.13 billion, from R2.12bn.
Net profit leapt 994 percent to R45.95m. Operating profit was 181 percent higher at R95.17m. The share price was up 11.11 percent at 100 cents late yesterday afternoon.
Cash generated from operations increased 82 percent to R1120.9m.
“We are very pleased with the interim results since coming out of lockdown Level 5 nearly 17 months ago. Quite simply, the performance over this period has been the most consistent and robust we have ever experienced,” directors said.
The acquisition and diversification strategy over the previous five years had played a big role in achieving sustainability and, despite the advent of the Covid-19 pandemic in late 2019, Insimbi had "weathered the storm with aplomb“, they said.
The company’s target industries and markets all seemed to have the “wind in their sail” and core operations performed well, despite challenges in some segments.
Volumes and revenues were back to, and even exceeding, pre-Covid-19 levels, and the company’s products were in demand both locally and for export.
“The local economy does seem to be evidencing some growth, but implementation of stimulus initiatives remains slow. We have noticed a level of resilience among South African citizens and businesses that is, quite frankly, extraordinary, but we are also starting to see an increase in the demise and closure of some business operations that can simply just not keep operating, and the impact on unemployment is a matter of statistical fact,” the company directors said.
Export duties on recycled ferrous and non-ferrous metal had come into effect from August 1, 2021, but the export of recycled metals remained a challenge.
This had been compounded by the civil unrest experienced in Kwa-Zulu Natal and Gauteng in July and the Transnet cyber-attack in August. Both these events had been remedied, but the reputational damage to Durban port persisted and shipping lines were loath to dock there, which had resulted in a logistic bottle-neck for both incoming and outgoing containerised goods via Durban, directors said.
“We are managing our exports accordingly and hope that the situation alleviates soon,” they said.
“We are confident our interim results and our rolling 12-month earnings are clear evidence of the potential and resilience of Insimbi, even under the most adverse of conditions,” they said.
The company did not declare an interim dividend due to uncertainty in the local and global markets as a result of the Covid-19 pandemic.
“Our core focus remains recycling and beneficiation of ferrous and non-ferrous metals and the supply thereof to both local and export clients and the integration and rationalisation of our acquisitions over the last 5 years, is now complete.”
Insimbi was generating strong cash flows and the company would de-gear the balance sheet further to facilitate potential strategic acquisitions in the future.
BUSINESS REPORT ONLINE