Metair charged up after a strong year


Metair charged up after a strong year

Published Date: 2019-03-15 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Metair charged up after a strong year

The group's automotive components and battery businesses both delivered strong growth and it expects conditions to remain favourable.

Metair has delivered a strong rise in 2018 earnings thanks to a decent performance from its local automotive components business and strong growth at its Mutlu Akü energy storage business in Turkey, which more than compensated for a slide in the Turkish lira over the period.

These are the group's two operating divisions. Automotive components supplies vehicle parts for top car manufacturers, while its energy storage business manufactures stop-start car batteries, amongst other things.

While much of corporate South Africa reported poor performances from their overseas operations, Metair says it was fortunate that the in-country performance of Mutlü Aku continued to be resilient with a 27% increase in turnover and 55% improvement in profitability. Over the year, the lira weakened by 17% relative to the rand. Metair said the business sustained its performance despite challenging global political and trade conditions.

In Romania, Rombat increased profit by 29%, with a 31% improvement to R87 million in rand terms. Rombat is the largely automotive lead-acid battery maker in Romania and has synergies with First National Battery, another of Metair's divisions. First National Battery had a weaker second half due to labour instability during bi-annual wage talks. Together, the group's energy businesses grew revenue by 3% to R6.38 billion and profit before interest and tax by 17% to R692 million

Its automotive components business grew turnover by 16% to R5.1 billion and profit before interest and tax by 16.5% to R509 million as higher volumes were supported by increased exports, especially in the light commercial vehicle market.

Group revenue rose 8% to R10.3 billion in the year to end-December, with its energy storage businesses contributing 56% of the total and the remaining 44% coming from automotive components. Earnings before interest, tax, depreciation and amortisation increased by 9.4% to R1.33 billion and headline earnings per share by 16% to 327c. It's paying a 100c per share dividend.

The group said it expected conditions for its automotive components business to remain favourable in the short to medium term, based on the increased stability and certainty created by the extension of the government's Automotive Production and Development Programme.

Its shares rose 1.7% to R21.60 yesterday.

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