Metair’s redesign eats into profit
Johannesburg - Metair says it has bolstered income 14 percent to R4 billion after completing its “strategic redesign” and being awarded a multi-year contract.
The automotive group adds its acquisition of 25 percent of Kenya’s largest battery manufacturer, Associated Battery Manufacturers, extends its alternative energy offering.
In a statement issued on Thursday, the group said a solid performance from the Energy Storage Vertical combined with the deal finalises its major redesign and lays the foundation for the two business verticals to build on into the future.
“Both Mutlu Akü in Turkey and Rombat in Romania performed well, contributing to an improvement in operating profit for the Energy Storage Vertical.
“The South African aftermarket business environment experienced some margin pressure and local market competition whilst automotive export margins were reduced to compensate for the currency effect and to maintain brand presence. Mutlu Akü resumed exports to Russia during the period following some geo-political stability.”
It notes its Automotive Component Vertical revenue was largely flat because of lower production volumes being offset by price increases to recover higher imported vehicle material cost.
Metair says it operating profit declined to R260 million from R345.8 million because of “complexities associated with the new model launch” which impacted efficiencies and required substantial investment in new technology.
As a result, it says, headline earnings per share – a key indicator of profit – declined to 54c a share from 111c a year ago.
MD Theo Loock notes its acquisition future business from its major original equipment manufacture customer base means it is less dependent on the traditionally cyclical automotive components business.
“Our strategic redesign process has resulted in a much more balanced portfolio.”IOL