Group Wreck buoys Insimbi

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Group Wreck buoys Insimbi

Published Date: 2019-10-09 | Source: Stephen Gunnion | Author: Stephen Gunnion

Group Wreck buoys Insimbi

The metals recycler says its first-half performance was hampered by floods in KwaZulu-Natal and subdued commodity prices.

Insimbi Industrial says last year's acquisition of Group Wreck International Non-Ferrous helped it weather a challenging local and global economic environment. Apart from extending the reach of its recycling business and taking it closer to export harbours, buying the KwaZulu-Natal-based business has already boosted its top and bottom lines.

Insimbi provides the steel, aluminium, cement, foundry, plastics, paper and pulp industries with resource-based commodities like ferrous and non-ferrous alloys, as well as refractory materials. It said its first-half performance was affected by floods and labour unrest that affected Transnet operations in Durban, creating a backlog at the port that continues to hamper exports of its recycled materials.

Commodity and, in particular metals prices, were subdued in the six months to end-August. It estimates that its weighted average basket price of products was between 12% and 15% down on international pricing compared to the same period a year earlier. Although this was partially offset by a weaker currency during the period under review, the rand price of the basket was still about 5% lower across the board.

The group said revenue growth of 13% to R2.42 billion justified the acquisitive strategy it embarked on three years ago. Operating profit rose 8% to R67.3 million and headline earnings per share grew 11% to 9.42c. It's kept its interim dividend steady at 2c per share. The group generated 232% more cash from its operations to R97.9 million.

Insimbi said its recent acquisition of Treppo Group would also be value accretive, providing further geographic expansion of the metal recycling and processing business. It expects trading conditions to remain challenging for the remainder of the year.

Its shares rose 2.8% to R1.10 yesterday.





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