Hulamin Extrusions continues its turnaround

Significant cost reduction efforts coupled with stringent controls over working capital helped reduce the impact of COVID-19 on Hulamin during the first six months of 2020. As experienced by most companies globally, the emergence of the coronavirus pandemic resulted in major disruptions to demand as well as our manufacturing operations. Consequently, the first half of 2020 was a particular challenging trading period for Hulamin.

Aluminium supplier and exporter, Hulamin, sells its aluminium products to leading manufacturers and distributors across many industries around the world. The South African company is based in Pietermaritzburg and specialises in rolled aluminium products for precision and high technology applications. The company supplies a significant proportion of the world’s ultra high-end aluminium products.

“Hulamin Extrusions’ turnaround continued. Although volumes were negatively impacted by the COVID-19 lockdown, green shoots of a successful turnaround are becoming evident. The business suffered a first-half loss, which includes costs related to the closure of the Olifantsfontein plant that have carried over into 2020. With the rightsizing of the business to one with a lower unit cost base, consolidated in Pietermaritzburg, largely complete, we are looking forward to a return to profitability in the second half of 2020,” said Richard Jacob, Hulamin Chief Executive Officer.

RESULTS HEADLINES

•     Group sales volume decreased by 35% to 71 000 tons

•     Revenue decreased by 30% to R3.7 billion

•     Loss per share increased by 26 cents to 75 cents per share

•     Negative free cash flow of R302 million

•     Balance sheet resilient, with net debt to equity of 27%

•     Turnaround actions delivering cost reductions, working capital controls; volume actions contained due to COVID-19