| Tue 30 Sep 2008, 9:42 | | ISB - INSIMBI - Press Release - Insimbi announces Stellar Maiden results, |
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ISB
ISB
ISB - INSIMBI - Press Release - Insimbi announces Stellar Maiden results,
dividend and revised forecast
INSIMBI REFRACTORY AND ALLOY SUPPLIES LTD
(Incorporated in the Republic of South Africa)
(Registration No: 2002/029821/06)
Share code: ISB & ISIN code: ZAE000116828
("Insimbi" or "the company")
INSIMBI ANNOUNCES STELLAR MAIDEN RESULTS, DIVIDEND AND REVISED FORECAST
Monday, 29 September: AltX listed Insimbi Refractory and Alloy Supplies Ltd
(Insimbi) today announced their maiden interim results for the six months ended
31 August 2008 since listing in March. "We are pleased with the solid
performance shown in all areas of the business, especially given the difficult
economic conditions locally and globally," says CEO, Pieter Schutte. Interim
earnings are 3.5% higher at interim than the full year forecast of 14.54 cents
per share as presented in the prelisting statement. A maiden interim dividend of
4c per share has been declared.
Financial highlights:
Revenue increased by 16.6% to R584m
Gross Profit increased by 122.8% to R85m
Operating Profit increased by 177% to R59m
Profit before Taxation increased by 273% to R56m
EPS based on pro forma 260 million shares increased by 904% to 15 cents
HEPS increased by 910% to 15 cents
Maiden Dividend of 4c per share
Schutte attributed the company`s performance to the continued focus and growth
of the infrastructure sector, the group`s focus on increasing margins across the
board and continued efforts to introduce new and innovative product lines. The
Rand`s performance against the US Dollar and sustainably higher prices for
ferrous and non ferrous alloys globally due to higher demand mainly in India and
China also contributed positively to the group`s performance.
The increase in revenue was achieved despite production problems experienced by
two of Insimbi`s major suppliers of pig iron and Ferro Manganese due to
explosions at their production facilities earlier this year. The plants are due
to come back on line by the end of the calendar year. Gross margins have almost
doubled when compared to the comparative 2007 interim period, with the increase
occurring predominantly as a result of good margins achieved on some strategic
stocks purchased prior to major price hikes in 2008, and the introduction of new
higher margin product lines.
The operational divisions with the exception of the refractory division all
performed above expectation. "The refractory division continues to face
challenges as a result of its main customers being located in Zimbabwe," says
Schutte.
Prospects for Insimbi remain excellent with economists predicting acceleration
in the infrastructure sector. Despite some softening of commodity prices
generally, the prices of many ferrous and non ferrous alloys are still trading
near their highs of earlier this year. The company is however not entirely
reliant on favourable commodity prices as stock is held on a just in time basis
and the risk of sudden movements in alloy prices is mitigated by the fact that
Insimbi pre-sells as much as 70% to 80% of their purchases.
Insimbi`s new industrial heat resistant textile company (Insimbi Thermal
Insulation (Pty) Ltd), a 51% black employee owned business, has performed better
than expectations, management looks forward to growth in the second half of the
financial year, primarily driven by new contracts with new and existing
customers and Eskom`s focus on upgrading it`s facilities.
Insimbi`s aluminium plant is expected to soon be trading above budget despite
some unexpected delays in the commissioning thereof. "With its capacity
increased to 1,300 tons of output per month, we are confident that this plant
will perform beyond our initial expectations and forecasts," says Schutte.
Management continues to evaluate strategic acquisitions in various associated
industries which will bring synergies and added value to the group.
Insimbi`s revised forecast figures to 28 February 2009 have also been released.
Forecast revenue and operating profit for the full year to 28 February 2009 are
R1.1bn and R102m respectively. Insimbi expects the full year gross profit for
2009 to be R152m, 83% higher than the corresponding figures in February 2008,
showing a strengthening of gross margins. Earnings per share of 25 cents is
forecast for February 2009 versus listing forecast of 14.54 cents per share.
-ENDS-
Insimbi Refractory & Alloy Supplies Limited ticker: "ISB"
Website: www.insimbi-alloys.co.za
Further enquiries please contact:
Pieter Schutte Insimbi 011 902 6930
Fred Botha Insimbi 011 902 6930
ChilliBush Investor Relations 011 646 7152
Michelle Doyle 082 784 1814
Nonhlanhla Moleya 083 564 1452
Notes to editors:
Metallurg South Africa was founded in 1970 by the previous shareholder,
Metallurg Europe Limited, a 100% subsidiary of Metallurg Incorporated.
Initially, Metallurg South Africa`s offices were located in the centre of
Johannesburg and warehousing was rented from Freight Services (Proprietary)
Limited. In 1992, the operation was moved to its current premises in Wadeville.
The Wadeville premises, which comprises approximately 9 000 m2 of offices and
warehousing facilities are wholly-owned by Insimbi Properties.
During the second half of 2003, the management of Metallurg South Africa entered
into the first phase MBO with Metallurg South Africa. The first phase MBO
received financial backing from Corfin, Corvest, and Tandem in the form of the
sale shares, preference shares, Corvest claims, loan agreement and Tandem
claims. Following the first phase MBO, Corfin, Corvest and Tandem effectively
owned 67% of the company and the director shareholders and Langham Carter owned
an effective 33%.
In order to highlight the company`s new ownership, the director shareholders,
Langham Carter, Corfin, Corvest and Tandem, decided to rebrand the company as
Insimbi Alloy Supplies (Proprietary) Limited.
Over the years, the core business of Insimbi expanded and today the company
operates seven divisions which are based on industries and geographic locations,
as follows:
Refractory Division which services the steel industry`s refractory
requirements;
Speciality Division which services the welding and optical industries;
Steel Division which services the steel industry`s raw material requirements;
Foundry Division which services the foundry industry, both automotive and
heavy;
Non-Ferrous Division which services the aluminium industry;
Rotary Division which services the cement industry`s refractory requirements;
and
KwaZulu-Natal Division which services the KwaZulu-Natal and Mozambique markets
in all of the above products.
The expansion of Insimbi`s core business has resulted in the strengthening of
the company`s technical back up and product ranges into the following major
manufacturing industries:
iron and steel;
ferrous and non-ferrous;
aluminium smelters;
foundries;
copper mining;
paper mills;
sugar mills; and
electro platers
Insimbi also caters for the small niche suppliers and markets and has over time
diversified into a number of different product lines and fields, namely:
ceramic bricks/linings;
aluminium alloy;
chemicals;
technical textiles; and
kiln re-alignment and mechanical preventative services
In April 2007, the director shareholders of Insimbi entered into the second
phase MBO whereby the shareholding and funding of Insimbi was further
restructured with the intention that, following the second phase MBO, the entire
shareholding of the company would be held by the director shareholders.
Insimbi was converted from a private company to a public company on 12 February
2008.
On 27 January 2008, Insimbi Alloy Supplies acquired the plant and equipment,
furniture and fittings and computers used by Future Alloys to conduct its
aluminium alloys business for a purchase consideration of R17.0 million. Future
Alloys manufactures aluminium alloys with its primary focus being on the
production of the ADC12 grade of alloy. The business complements that of Insimbi
Alloy Supplies and its smelting plant currently has excess capacity. The
acquisition allows Insimbi Alloy Supplies to make use of Future Alloys` existing
manufacturing facilities, while also offering Insimbi access to greater
capacity.
Insimbi listed on AltX on 14 March 2008. R48m was raised during the private
placement.
30 September 2008
Date: 30/09/2008 09:42:01 Produced by the JSE SENS Department.
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