Insimbi claims solid results for the six months to August 2023

Operating conditions in the first half of Insimbi new financial year remained challenging, although price fluctuations in its key commodities (copper, aluminium, nickel and steel) largely balanced each other out.

While the global economy shows signs of improvement, the upturn remains weak, with significant downside risks.

Lower energy prices are taming headline inflation and China’s reopening has boosted global activity. But core inflation is proving persistent, and the impact of higher interest rates is evident across the global economy. In South Africa, higher inflation has seen the Reserve Bank raise interest rates over 4% in the past year. The concomitant impact on businesses has been exacerbated by the ongoing and significant issues at key parastatals for logistics and power, respectively Transnet and Eskom.

Against this background, Insimbi produced solid results for the six months to August 2023, underscoring the benefit of our diversified portfolio. In addition to timely management action, this diverse asset base has shielded the Group from the impact of the government ban on exporting recycled metals, which is currently in place until December 2023. Reflecting the consistent performance of our operations, in the interim period Insimbi has:

• Largely maintained revenue at over R3 billion (-4% vs interim period in 2022) although operating profit declined 9%.
• Continued to manage increases in operating expenditure, despite record hikes in fuel and transport logistics as well as the ongoing instability of power supplies. The significant cost reductions effected to date are sustainable as Insimbi operates a leaner and resilient business.
• Reduced Insimbi debt-to-equity ratio from over 99% in the 2021 financial year to 61% in the 2023 financial year and maintained this level despite the noted interest rate increases.
• Met all its financial covenants at reporting date.

Overall, Insimbi target industries and markets continue to develop, its core operations have performed well and demand for its products remains strong, both locally and for export.