Insimbi’s best financial quarter in its 50-year history
Insimbi Industrial Holdings, in its summary of the unreviewed consolidated condensed financial results for the six months ended 31 August 2020, says the first 6 months of the current financial year were extremely challenging due to the impact of the Covid-19 pandemic and the related lockdown policy implemented by the South African government.
This compounded the recessionary economic environment that was already firmly entrenched in SA economy and so it is no surprise, that the group’s performance in the first half of the year has been negatively impacted as a consequence of the unique situation that the company find itself in.
The 5 week “hard” lockdown from 27th March 2020 to 4th May 2020, was especially damaging as Insimbi’s operations were classed as non-essential and resulted in almost zero revenue generated during this period and with the closure pre- and the re-opening post- this lockdown, it is fair to say the company losts almost 7 weeks’ worth of revenue and gross profit whilst still incurring a significant portion of operating costs during that period.
To mitigate some of the impact due to the lost revenue and gross profit, Insimbi turned its focus to stringent cost-cutting measures across the group. It also used the time to formulate new strategies for some under-performing operations and the company has been successful in both these areas.
Commodity prices and in particular metals, have rebounded and combined with the weaker currency, this has also improved or “buffered” the situation, proof of the underlying Rand-hedge nature of the group.
The company is very pleased to note therefore, that despite the significant decline in its earnings and headline earnings when compared with the previous interim period, that the second financial quarter from 1st June 2020 to 31st August 2020 after the lifting of Level 5 and 4 lockdown, generated earnings and headline earnings of almost 8 cents per share and EBITDA of over R50 million, the company’s most successful financial quarter in its 50 year history, this despite operating at only about 80% of our capacity during this period.
Insimbi is a group of companies purposefully brought together to provide resource-based supplies to a wide range of industrial consumers, offering 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.
