Hulamin experienced particularly difficult conditions during 2019. Export sales to the United States were disrupted by blockages in our distribution channel, the global economy slowed measurably through the year (prompted by a well-recorded slowing in China), while local regional demand came under severe pressure throughout the year.
Hulamin has reported its Group sales volumes decreased by 11% to 219 000 tons. Headline earnings were down by 182% to a loss of R240 million impacted by restructuring costs, a negative metal price lag and Isizinda restructuring.
Following the absorption of working capital in the first half of 2019, Hulamin paid specific attention to managing borrowings, to end the year 23% lower than 2018 at R226 million. This represents a positive cash flow during 2019 of R68 million.
Hulamin Extrusions suffered a first-half loss, which includes a provision for restructuring costs that were actioned largely in the second half. Sales volumes were measurably lower following a manufacturing disruption.
Hulamin have concluded rightsizing programmes (in both Hulamin Extrusions and Hulamin Rolled Products). This action has resulted in the closure of the Hulamin Extrusions operation in Olifantsfontein and the consolidation of operations in Pietermaritzburg.
The outbreak of the Covid-19 pandemic in late 2019 and early 2020 has had a serious impact on all Hulamin’s markets. It is likely to reduce sales volumes considerably and counteract the benefits of cost-saving actioned in 2019 as well as the weaker Rand / Dollar exchange rate.