Revised update shows that Hulamin expects ‘at least 82%’ earnings decline
JSE-LISTED listed aluminium supplier Hulamin said it expected its basic earnings a share and headline earnings a share to decline by at least 82 percent for the six months to June.
The group said in a revised update yesterday that the stronger rand against the US dollar had constrained its earnings further from the 55 percent it predicted when it issued the first update to shareholders in May.
Hulamin said both earnings a share and headline earnings a share would not be higher than 25 cents a share during the period.
The news sent Hulamin shares into a frenzy in early trade on the JSE yesterday, falling more than 8 percent before clawing back to close 4.2 percent lower at R4.79.
Hulamin said its basic earnings a share and headline earnings a share during the period would likely be between 10c and 16c a share and 82 percent and 71 percent respectively lower than 56c in the prior comparative period.
“The stronger average level of the currency for the four months to April 2018 of R11.98/ dollar relative to the comparative period of R13.29/dollar has had a negative effect on profit before metal price lag, amounting to about R87 million,” the group said.
“In addition, the fall in the rand aluminium price, driven by the appreciable strengthening of the rand, has resulted in an adverse metal price lag of R100m over the four months to date. Conversely, a positive metal price lag of R78m was recorded in the six months to June 2017. The rand aluminium price has risen since April 2018, but remains volatile.”
The group said it continued to experience strong underlying profit performance measured in constant currency operating profit before metal price lag.
Last year, Hulamin delivered a 17 percent increase in headline earnings to R178m, while turnover increased by 3 percent to R5.1 billion.
Earnings before interest and taxation were 11 percent higher at R286m and sales volumes were up by 8 percent to 119 000 tons.
The group is expected to release its half-year numbers at the end of the month.