Hulamin, a leading aluminium product and beverage can maker released full year 2016 results earlier this week and reported record sales volumes and double profit after tax.
The company was ridden by irregular electricity supply from Eskom and gas supply problems during the last year. However, the group managed to get over the bottlenecks and achieve record production and sales volumes during 2016, CEO Richard Jacob said.
Hulamin failed to pay any dividend in 2015 after paying a 25c dividend in 2014. The group declared a final dividend of 15c and 8c interim dividend to make it a total of 23c. According to the results statement the group’s turnover grew 20% to R10bn and its profit after tax grew 135% to R385m.
Higher aluminium prices in 2016 helped Hulamin book a "metal price lag profit" of R50m from a R161m loss during bearish 2015. The total sales volumes increased 17% to 232,000 tonnes in 2016.
"Local demand for beverage can stock products started the year under pressure and recovered somewhat in the second half to end the year at a similar level to 2015," Jacob said.
"The increased demand for can stock in the second half allowed us to source additional volumes of scrap. Now that the recycling facility is fully commissioned and contributing to overall business performance, albeit ramping up to full capacity in conjunction with the growth in sales of can body stock, we are increasing our activities in sourcing all forms of scrap," he added.
The record results were driven primarily by Hulamin’s rolled products division, which increased sales volumes by 19% to 214,000 tonnes. Rolled products manufacturing conversion costs per tonne were down 10.7% in real terms.
According to the report, Hulamin’s operational performance at its Isizinda cast house continued to improve in 2016. Hulamin’s supplies aluminium car parts to carmakers like Tesla.
After a capital investment plan, Hulamin’s extrusions division also improved its performance leveraging on "the very dynamic local market".