Hulamin posts a 147% jump in half-yearly earnings; revenue grows 45% despite increased production costs

Hulamin, a South African aluminium supplier and exporter, announced robust earnings, with a hike of 147 per cent for the first half of 2022 ended June 30. Revenue rose by 45 per cent to R7.9 billion, and operating profit surged by 144 per cent to R223 million amid the challenges posed on working capital by a record high LME aluminium price during the said period.

Outgoing Hulamin CEO Richard Jacob said: “… 2022 began with solid demand, firmer prices than in recent years, and a weaker rand/dollar exchange rate. Turnover increased by 45 percent, and profits increased by 144 percent, despite the constraints experienced at Durban Port; the impact on the automotive market due to the KwaZulu-Natal floods; and the challenges posed on working capital by the record-high LME Aluminium prices experienced in the first half of 2022.”

Jacob also said the company’s turnover from rolled products increased by 47 per cent in H1, while that from extrusions by 13 per cent compared to the same period last year.

Inflation in Hulamin’s production costs caused by the impact of commodity prices was primarily offset by optimised product sales mix and negotiating pricing to maintain margins, which resulted in a strong financial outcome.

"Hulamin Rolled Products has continued to benefit from firm local, and international demand for can stock as aluminium packaging displaces glass and plastic,” the group said.

Hulamin’s revenue from the extrusion business in H1 stood at R422 million versus R372 million a year ago. The revenue growth rate from extrusion was relatively lower as several projects were negatively impacted by the floods in KwaZulu-Natal, coupled with weak automotive demand due to global microprocessor shortage.

However, the extrusion business is anticipated to grow in H2 2022, with Hulamin’s increasing manufacturing capacity.

"With a full order book, this will enable sales growth, increased scrap utilisation, and improved cash flow as the inventory build that occurred in the first half of the year flows into revenue in the second half of 2022,” explained the company.