METAIR INVESTMENTS LIMITED – Results for the six months ended 30 June 2019

2019/08/14 07:05:00
SENS announcement for JSE listed company: MTA
                        

MTA 201908140001A
Results for the six months ended 30 June 2019

METAIR INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(‘Metair’ or ‘the group’ or ‘the company’)
(Reg No. 1948/031013/06)
Share code: MTA ISIN code: ZAE 000090692

Results for the six months ended 30 June 2019

Six months ended Year ended
30 June 30 June 31 December
FINANCIAL SUMMARY# 2019 2018 2018 Change
R’000 R’000 R’000 %
Revenue 5 344 472 4 483 478 10 276 966 19%
Operating profit 498 653 412 886 1 008 670 21%
EBITDA 699 436 585 661 1 329 677 19%
Headline earnings per share (cents) 160 132 327 21%
Earnings per share (cents) 161 132 338 22%
Dividends per share (cents) 100 80 80 25%
Net asset value per share (cents) 2 068 2 000 2 167 3%
Cash generated from operations 174 816 223 159 887 748 -22%

# The group has initially applied IFRS 16 at 1 January 2019. Under the transition methods
chosen, comparative information has not been restated.

Headline earnings per share
increased 21% to 160 cents per share

Automotive
Components Vertical
ROIC up to 34.3%

Energy Storage
Vertical ROIC
up to 19.2%

Investor Roadshow 14-16 August 2019

INTERIM RESULTS COMMENTARY – JUNE 2019
Metair is pleased to announce good results in challenging
trading conditions to the market with an increase in
headline earnings of 21% to 160 cents per share from 132 cents
per share in the comparative period.

Revenue grew by 19% from R4.483 billion to
R5.344 billion. The energy storage vertical turnover grew
by 14% contributing 51% to the group’s revenue and
the automotive components vertical turnover grew by
24% contributing 49% of the group’s revenue.

At operating profit level, both business verticals increased
by 16% with the energy storage vertical contributing
R289 million and the automotive components vertical
contributing R302 million to the group’s total operating
profit of R499 million after taking into account reconciling items.

Group earnings before interest, tax, depreciation and
amortisation (EBITDA) grew 19% to R699 million in the period.

Energy storage vertical
All businesses in diverse geographies performed very well
with improved performance from First National Battery in
South Africa and Mutlu Aku in Turkey.

The focussed and improved export volumes in Turkey
from Mutlu Aku managed to offset the 16% devaluation
in the Turkish local currency (Turkish Lira) as exports grew
85% in the first half of the year.

Rombat in Romania managed to sustain its performance
in a challenging European trading environment.

Margins in the energy storage vertical grew to 9.4% from
8.9% contributing to the improved return on invested
capital (ROIC) of 19.2% from 16.7%.

Automotive components vertical
Despite a challenging January start-up by customers in South
Africa followed by market and production volume level
stabilisation issues, the automotive components vertical
performed well and benefited from an increased volume
output trend.

Some of the increased volume output in the first half of
the year related to the automotive industry’s contingency
plans for the renewal of wage agreements planned for the
second half of 2019.

Margins declined slightly from 10.9% to 10.2% in support
of customers’ required volume and flexible production
pattern demand requirements.

OUTLOOK
As we enter a sensitive and delicate phase in the labour
environment, which is critical in providing a stable and
sustained manufacturing base it is difficult to formulate the
outlook for the second half of the year.

Metair operates best in a stable and high-volume
production environment. Structurally, the volume and
production outlook environment should continue its
upward volume trend.

In the short term, the trend is subject to the timeous
and responsible resolution and renewal of the wage
agreements by customers and automotive component
manufacturers in South Africa.

Energy storage vertical
Although the geopolitical position in Turkey has improved
slightly and the macro-economic indicators such as inflation
and interest rates improved towards the end of the first half
of 2019, the devaluation of the Turkish Lira persisted.

Metair would prefer to see a stabilisation in the exchange
rate environment rather than the persistent challenge of
beating the currency devaluation.

Historically the energy storage vertical is a business that
performs better in the second half of a financial year, as
we enter into the European and other export markets
winter demand cycle for batteries. We expect this trend to
continue and aim to build on our growth opportunities in
the export markets.

Automotive components vertical
Local OEM customers plan to offset the softer vehicle
demand trend in South Africa by potential growth in
their export markets and model production expansion
opportunity.

Structural support and commitment in the industry to grow
the manufacturing base remains high in the medium – to
long-term.

In the short-term, production stability is dependent
on the successful conclusion of the wage agreement
renewal cycle.

FOR FURTHER INFORMATION
This short-form announcement is the reponsibility of the directors
and is only a summary of the information in the full announcement
and does not contain full or complete details.

Any investment decision should be based on the full announcement
that has been published on SENS today, 14 August 2019
(https://senspdf.jse.co.za/documents/2019/JSE/ISSE/MTA/interim19.pdf)
and is also available on our website (http://www.metair.co.za/investors/results-centre/).

The full announcement is also available at our registered office
and our sponsor’s office for inspection, at no charge, during office
hours. An investor and analyst audio webcast of the presentation
will be broadcast on Wednesday, 14 August 2019 at 10h00 (SAST),
for further information refer to the full announcement.

At the Investor Roadshow, Metair will be hosting site visits
during which presentations will be made regarding the company’s
various operations.

The presentations are available on the company’s website
(http://www.metair.co.za/investors/presentations/).

REGISTRARS
Computershare Investor Services (Pty) Limited
Rosebank Towers, 15 Biermann Avenue,
Rosebank, 2196

SPONSOR
One Capital

INVESTOR RELATIONS
Instinctif Partners

EXECUTIVE DIRECTORS: CT Loock (Managing); S Douwenga (Finance)

INDEPENDENT NON-EXECUTIVE DIRECTORS: SG Pretorius (Chairman);
TN Mgoduso; PPJ Derby; G Motau; B Mawasha; CMD Flemming;
S Sithole; MH Muell; NL Mkhondo

COMPANY SECRETARY: SM Vermaak

Date: 14/08/2019 07:05:00
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