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Metair prepared for Covid-19
Metair prepared for Covid-19
Published Date: 2020-03-19 | Source: Stephen Gunnion | Author: Stephen Gunnion
The manufacturer has benefited from new vehicle launches but says it is already seeing declines in new vehicle sales and exports due to the pandemic.
Metair says the outbreak of Covid-19 will reshape the way businesses operate. The auto components and energy storage group says government and the private sector need to work together to develop response plans that allow industry to continue operating while safeguarding public health.
Announcing a record annual performance for 2019, Metair said it was in a position to adapt quickly and had the infrastructure and resources available to keep its workers safe while helping to control the spread of the pandemic.
Metair's auto components business makes spare parts for car makers and original equipment manufacturers (OEMs) and is at its busiest during new vehicle launches. Its energy storage vertical develops and makes batteries and produced the group's first lithium-ion battery cells in Romania last year, with official production set to begin before June.
Automotive Components was supported last year by exports and continued expansion of its operations. It said all companies in the division successfully secured major contracts arising from new vehicle launches planned to service the export and local markets. Apart from Mercedes Benz, its businesses secured business from the launch of new Nissan, Volkswagen and Isuzu models. Turnover from the division increased by 11.3% to R5.6 billion and profit before interest and tax rose by 5.7% to R538 million.
The performance of Energy Storage was supported by strong local aftermarket volumes. Revenue rose 7.4% to R6.9 billion, helped by an increase in volumes supported by a strong local aftermarket which contributed to an improved performance from First National Battery. However, profitability was impacted by subdued conditions in Romania, some difficult export contracts out of Turkey and lower industrial demand at home.
Group revenue rose 9.4% to R11.2 billion in the year to end-December and earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 4.6% to R1.4 billion. The group reported a 2.8% rise in headline earnings per share to 336c and increased its dividend by 20% to 120c. Cash generated from its operations jumped 40% to R1.2 billion.
Metair said trading so far this year had been affected by a number of challenging external factors including a labour disruption at a major customer and market volume declines in new vehicle sales and exports which have been affected by the breakout of Covid-19.
It said it was still investigating the possible managed separation of its two divisions as they were at different stages in their growth cycles and required different strategic responses and support structures.
Its shares fell 11% to R13.50 yesterday.