https://www.miningweekly.com
Automotive|Business|Components|Energy|Export|Financial|Logistics|Manufacturing|PROJECT|Storage|supply-chain|Manufacturing |Solutions|Operations
Automotive|Business|Components|Energy|Export|Financial|Logistics|Manufacturing|PROJECT|Storage|supply-chain|Manufacturing |Solutions|Operations
automotive|business|components|energy|export|financial|logistics|manufacturing|project|storage|supply chain|manufacturing-industry-term|solutions|operations

Hyperinflation, higher costs take big bite out of Metair’s profits

14th April 2023

By: Irma Venter

Creamer Media Senior Deputy Editor

     

Font size: - +

Metair faced a tough 2022 financial year, with its results significantly impacted on by hyperinflation in Türkiye; project costs to support the launch of the new Ford Ranger; higher logistics costs; the knock-on effects of flooding at the Toyota plant; and increased interest charges, owing to high net-debt levels.

These factors, combined with higher energy costs, “required active management to stabilise operations”, says the international manufacturer, distributor and retailer of energy-storage solutions and automotive components.

The JSE-listed Metair saw group revenue for the financial year ended December 31 increase by 10%, to R13.91-billion, boosted by overall higher vehicle production, as well as strong export sales from Türkiye.

Growth in battery unit prices and increased cost content in components also contributed to higher sales prices.

However, the group’s operating profit fell sharply from R1.16-billion to R453-million.

“These results are reflective of a number of extraordinary external impacts which occurred at a time when we are investing heavily for future growth,” says interim CEO Sjoerd Douwenga.

“Our teams did well to maintain supply to our customers and deliver on our strategic priorities, navigating global supply chain disruptions and raw material shortages, lost production due to the impact of the KwaZulu-Natal floods on our major customer [Toyota], inflationary cost pressures and higher energy costs.

“Looking through the noise, particularly the noncash impact of hyperinflation accounting for Mutlu [in Türkiye], our underlying business performance remains solid and our prospects are promising, with our strategic investments estimated to deliver R60-billion in revenue over the next decade,” says Douwenga.

The Automotive Components Vertical contributed R7.1-billion in revenue, a 5% increase on the prior year.

The vertical generated operating profit of R45-million, with margins impacted on by manufacturing launch inefficiencies and learning curve costs, the payment of premium logistics costs and other one-off model launch project costs.

The South African operations were significantly affected by the loss of production at Toyota. However, Metair’s business interruption insurance claim, capped at R500-million, was successfully finalised.

Production of the group’s major new model investment, the next-generation Ford Ranger, started mid-November, with peak levels expected to be reached from this month onwards.

The Energy Storage Vertical faced high inflation, fuelled by unprecedented energy and labour cost increases across Türkiye and Romania.

These costs impact on margins in the short term, as they are yet to be recovered from customers.

Revenue increased by 14.2% to R8.6-billion, mainly owing to improved volumes, the impact of hyperinflation and higher average lead prices. Operating profit was R195-million.

Metair’s total capital expenditure reached R1.16-billion, in order to facilitate increased capacity ahead of new model launches and vehicle facelifts.

Net debt is at R2.6-billion.

“We are closely managing the group’s financial position with a focus on effective cash management, specifically in the areas of working capital, cost control and capital expenditure, as we support our customers with their requirements and planned investments,” says interim CFO Anesh Jogia.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

Comments

Latest Multimedia

Photo of Martin Creamer
On-The-Air (29/09/2023)
Updated 3 hours ago By: Martin Creamer

Showroom

WearCheck
WearCheck

Leading condition monitoring specialists, WearCheck, help boost machinery lifespan and reduce catastrophic component failure through the scientific...

VISIT SHOWROOM 
Werner South Africa Pumps & Equipment (PTY) LTD
Werner South Africa Pumps & Equipment (PTY) LTD

For over 30 years, Werner South Africa Pumps & Equipment (PTY) LTD has been designing, manufacturing, supplying and maintaining specialist...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine round up | 29 September 2023
Magazine round up | 29 September 2023
29th September 2023

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.14 0.171s - 91pq - 2rq
Subscribe Now