Hulamin (HLM) H1 2024 earnings summary

Executive summary

• Local market sales grew 77% year-on-year, now comprising 54–55% of total sales, driven by can body demand and a customer-centric strategy.

• Export demand recovered in late H1 2024, but overall group revenue declined 6% year-on-year due to lower volumes and export pricing pressure.

• Simplification strategy led to discontinuation of low-margin products, improving product mix but reducing volumes.

• Capital investments increased 114% to R302 million, focusing on growth markets and production capabilities.

• Export market recovery was temporarily set back by a fire in the Coil Coating Line, with repairs on track for mid-September resumption.

Financial highlights

• Normalized EBIT down 27% year-on-year, but significantly higher than H2 2023.

• Normalized EBITDA declined 19% to ZAR 343 million year-on-year; up 76% sequentially from H2 2023.

• Group revenue down 6% year-on-year, but up 9% sequentially from H2 2023.

• Net profit attributable to shareholders was R257 million, down from R294 million in H1 2023.

• Debt to equity ratio increased to 38.3% from 28.1% in H1 2023.

Outlook and guidance

• Local market conditions expected to remain resilient for the rest of 2024; export demand has recovered.

• Export can end and tab production to resume mid-September after Line 2 repairs.

• Focus on reducing inventory to 44,000 tons by year-end to release cash flows and improve conversions.

• Net debt reduction and working capital optimization remain top priorities.

• Management expects agility in H2 2024, focusing on high-margin products and cost containment.