Metair is back in the black
• New CEO focuses on several challenges, including restructuring Metair balance sheet to reset group for growth
Metair has returned to the black, reporting a solid performance as it focuses on the recovery of the wiring business at its managed associate Hesto Harnesses and stabilising Mutlu Akü in Turkey.
The automotive components manufacturer and battery maker reported headline earnings per share of 135c for the year ended December after a loss of 17c the year before.
Group revenue increased 14% to R15.9bn, supported by improved original equipment manufacturer (OEM) production volumes in SA and increased price growth mainly due to higher material cost content and complexity.
The automotive components business, excluding Hesto which is accounted for as an associate, contributed R7.8bn to group revenue, a 48% increase from 2022. Hesto’s revenue increased by 222% to R5.7bn.
Revenue from the energy storage business dropped 7% to R8bn due to lower aftermarket volumes (including exports) as well as currency translation effects arising from Mutlu Akü. Group earnings before interest, taxation, depreciation and amortisation (ebitda) increased 86% to R1.1bn.
The group said that it was emerging from a year of the operating environment being particularly challenging.
At the same time, the complexity of doing business in the automotive industry had increased exponentially and the company commenced its largest-yet expansion project to support a major customer’s new model launch.
“The hard decisions Metair is taking will restore stability and turn Metair around to return to long-term value creation,” said the company.
Metair did not declare a dividend for the financial year.
The company’s third CEO in a year, Paul O’Flaherty, started in the position in January.
The pressure is on O’Flaherty to bring stability to the company after a year of executives jumping ship in a tough operational climate.
A chartered accountant, O’Flaherty has occupied various executive roles in the private and public sectors, including being former CEO of SA’s biggest steel producer, ArcelorMittal SA, from 2014 to 2016. The former finance director of power utility Eskom has held senior positions in large multinationals and joins Metair from EY Parthenon Africa, where he has been an executive director since 2021.
O’Flaherty has had to quickly find his feet as he entered tough terrain that has seen reduced OEM production volumes in SA due to raw-material shortages, supply chain delays and the KwaZulu-Natal flooding, as well as sharp increases in energy costs in Europe because of the war in Ukraine.
“My immediate focus is to restore leadership capacity, stabilise Hesto, reach a decision on the way forward with Mutlu Akü and address the potential EU antitrust issue at Rombat,” he said.
“At the same time, we are focused on restructuring Metair’s balance sheet to reset the group for growth.
“We are working on these issues daily to start generating momentum in the business. This does not mean we are not forward-focused at the same time. We have also started the process of reviewing the group’s strategy. Since joining, I have also been meeting Metair’s stakeholders to understand their key concerns,” said O’Flaherty.
THE HARD DECISIONS WILL RESTORE … STABILITY AND TURN METAIR AROUND TO RETURN TO LONGTERM VALUE CREATION