Hulamin reports big growth

2008-02-13 00:00

Hulamin, the JSE listed Pietermaritzburg-based manufacturer, yesterday reported revenue growth of 20% to R6,6 billion for the year ended December 31, 2007, with an operating profit — prior to taking into account the corporate structuring cost — of R380 million.

The figures reflect an underlying operating profit growth of 43% for the city-based exporter.

Speaking to The Witness yesterday shortly after the release of the company’s 2007 results, Hulamin CEO Alan Fourie stressed that while there is serious talk of a U.S.-triggered global slowdown, the company has already created a healthy “client-base” outside of the U.S., particularly in Europe.

“We’ll take it in our stride. We are very competitive and we have had a situation where the market wants more than we can supply and this will continue. There have been some geographical changes — and we have made great strides in Europe.”

Hulamin also reported a slowdown in the growth in local demand for rolled products.

Fourie stressed the importance of using the “underlying operating profit” as a yardstick when evaluating Hulamin’s performance.

“It is ironic because 2007 was one of our better years, yet all these figures [structuring costs] cause anomalies in the results.”

Hulamin achieved a five percent increase in sales volumes largely arising from increased sales in rolled products, better margins, higher aluminium prices and a four percent weakening in the average exchange rate for the year.

Several highlights underpinned the year for the company, including Hulamin’s JSE listing and the conclusion of various empowerment deals.

Fourie stressed that it will be some time before the BEE partners, communities set to benefit from the deal and employees (with an effective five percent stake in the company) experience tangible benefits resulting from the deal.

“As we grow and grow our earnings we will create more tangible benefits.”

Hulamin recorded headline earnings of R40 million and an annual dividend of R105 million.

A final dividend of 30 cents per share was declared.

While Fourie conceded that “2007 was not a great year for costs”, he added that they were able to manage various challenges related to producer inflation.

Fourie said Hulamin’s R900 million expansion programme is on track, adding that R570 million is expected to be spent in 2008.

“The expansion is on schedule and within budget. It’s a huge credit to the team working on the project. They have worked 700 000 man hours on the project and it has not cost a single ‘lost-time injury’.”

Limited commissioning will begin in the final quarter of this year.

The company achieved a positive cash flow of R209 million before dividends and expansion project payments.

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