Insimbi Industrial Holdings releases trading statement
Due to the Covid-19 restrictions and lockdown measures implemented by the South African government, Insimbi Industrial Holdings’ operations have been severely impacted. The Group’s activities were not classified as essential services and were effectively closed from 27 March 2020 and re-opened in a phased approach from 4 May 2020.
This Level 5 lockdown, therefore, took place within Group’s first financial quarter and as a result impacted significantly on this quarters’ performance. During the second financial quarter, the Group had resumed activities in accordance and compliance with the appropriate gazetted levels.
Insimbi estimates that Covid-19 and the resultant lockdown levels has had a negative impact on the Group’s interim revenue of approximately R800 million to R900 million and a resultant loss of gross profit of between R65 million and R75 million.
All Covid-19 related expenses (which includes restructuring and retrenchment costs amounting to approximately R1.8 million) have been expensed in the current period.
Cash generated from operations are expected to be between R87.73 million and R77.94 million.
Consequently, the Group hereby advises that a reasonable degree of certainty exists that for the six months ended 31 August 2020, earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between R60.51 million and R52.98 million (2019: R85.2 million) a decrease between 29% and 39%.
The Group has obtained covenant relaxations from its lenders for both the 30 August 2020 and the 31 November 2020 measurement periods with a return to normal covenant levels expected to be reached by February 2021.
The Group’s debt equity ratio has improved from 129% at 29 February 2020 to 105% at 31 August 2020.
Insimbi is a group of companies purposefully brought together to provide resource-based supplies to a wide range of industrial consumers. From modest beginnings in 1970, the group now offers ferrous and non-ferrous alloys; refractory and foundry materials; plastic blow moulding, injection moulding and rotomoulding production; and alloy recycling processes to national, regional and international markets.
