Hulamin has responded to the tough trading conditions of 2019 and 2020, producing improved results in 2021. The focus in 2021 included increasing volumes, realising higher prices and growing local sales.
Both a higher Rand London Metal Exchange (“LME”) Aluminium price and the recognition of assessed losses of R115 million (37 cents per share) contributed to the improved profitability. Group sales totalled 222 000 tons, including 209 000 tons from Hulamin Rolled Products. Local can stock sales grew by 109%. Total local rolled products sales reached close to 90 000 tons, up by 54% from 2020.
Hulamin and South32 signed updated conditional agreements in 2020 for the period 2020 to 2024 for the supply of molten and solid ingot aluminium. This agreement was subject to the conclusion of an electricity supply agreement between Hillside and Eskom by the National Energy Regulator of South Africa. This approval was published during 2021.
Hulamin Rolled Products grew its local sales by 65% on the back of the increase in can stock and other rolled sheet and plate products and local foil by 30% and 35%, respectively. Sales in the second half of the year amounted to 112 000 tons, an increase of 17% from 96 000 tons in the first half.
The increase in local beverage can stock demand is in line with global trends, driven by the environmental impact of single use plastics (largely in the carbonated soft drink market) and the recognition of aluminium as a 100% recyclable material as well as a shortage of glass in the region.
Following the implementation of our 2020 turnaround plans, Hulamin Extrusions performed well in
2021, with sales growing by 17% resulting in a meaningful increase in profits. The business finalised its sale of the Olifantsfontein property, which contributed to this profit.
Hulamin’s underlying business health has improved. Increases in the LME price of Aluminium will likely constrain the balance sheet and may constrain volumes should further increases occur. This risk is heightened by the energy crisis and Aluminium supply constraints arising from the Ukraine conflict.
Hulamin anticipates that the disruptive effect of Covid-19 related lockdowns will continue to subside during 2022. Order books are healthy going into 2022, supported by a firm market for beverage can products.