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Metair expects higher earnings for 2017 financial year

Feb 14, 2018 Metair, economy, South Africa, Automotive components, parts, Aftermarket, First National Battery, batteries,


Metair has announced that it is in the process of finalising its results for the year ended 31 December 2017, and as such has released that it expects to report higher earnings for that period.


The company says it expects headline earnings per share to be between 20.6% and 24.6% higher (between 276 cents and 285 cents per share) than the 229 cents per share for the previous corresponding period.


The company's automotive component division recovered after a difficult 2016, returning to satisfactory profitability after the disruption of the new vehicle launch. “Trading for the Period, therefore, sustained the progressive improvement in performance from the second half of 2016. All of the automotive components businesses managed to settle into a more stable post launch business cycle during the Period.”

 

Its energy division also had a strong finish to the year. “The Turkish battery business again experienced record production output for the year on the back of excellent last quarter demand. Competition remained high in South Africa, however performance improved after a difficult 2016, as the corrective action at First National Battery progressed as planned.The exceptional operating performance from Turkey was muted by the weak Turkish Lira as a result of political uncertainty.”


The announcement continued that the automotive components division is expected to achieve mid-single digit full year turnover growth, and is also expected to achieve profit before interest and tax (“PBIT”) margins of approximately 10% for the full year. The margins are higher than the revised medium term guidance provided in December 2017 of between 7% and 9%, largely due to certain non-recurring items that improved the margin above the guidance levels.

 

“The major improvement in performance was at Hesto Harnesses specifically, which improved from a loss position in 2016.” Metair confirmed it had successfully secured an additional 5 year revolving credit facility, to the value of R525 million at a margin of 235 basis points above 3 month JIBAR, from Metair’s lenders Standard Bank, ABSA and Investec. Full results will be published in mid-March.  

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