| Thu 23 Apr 2009, 16:50 | | HLM - Hulamin - Statement By The Chairman At The Annual General Meeting Of |
|
HLM
HLM
HLM - Hulamin - Statement By The Chairman At The Annual General Meeting Of
Hulamin Limited And Trading Statement, And Cautionary Announcement
HULAMIN LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1940/013924/06)
Share Code: HLM
ISIN: ZAE000096210
("Hulamin" or "the company")
STATEMENT BY THE CHAIRMAN AT THE ANNUAL GENERAL MEETING OF HULAMIN LIMITED AND
TRADING STATEMENT, AND CAUTIONARY ANNOUNCEMENT
Mafika Mkhwanazi, Chairman of Hulamin Limited, made the following remarks at
the Annual General Meeting of Hulamin shareholders held in Pietermaritzburg
today:
Destocking and reduced demand in a number of important markets since October
2008 has resulted in Hulamin`s sales volumes in the first quarter of 2009
being approximately 40% below the first quarter of 2008.
Sales into the automotive sector, heat treated plate and other distributor
products into the general engineering sector have been most severely affected.
Demand has however improved significantly as the year has progressed and it is
expected that sales for the second quarter will be approximately 15% below the
average sales achieved in 2008. There are indications that the improved sales
trend will continue into the second half of 2009.
The reduction in volumes and resulting changes to the sales mix has impacted
negatively on the average US Dollar export margins earned in the first
quarter, which were slightly below those achieved in the first quarter of
2008. As the business has a relatively high proportion of fixed costs, it has
not been possible to implement cost reductions that fully offset the effects
of the reduced sales volumes.
Operating profit for the first half is therefore expected to be between R105
million and R125 million compared to the R270 million earned in the first half
of 2008.
Finance costs will be higher than the previous year as a consequence of
expenditure on the Rolled Products Expansion Project, and the tax rate will be
higher due to the once-off impact of the R31 million deferred tax benefit in
the H1 2008 results (resulting from the change in the corporate tax rate).
Earnings and headline earnings in the first half of 2009 are therefore
expected to be between R15 million (7 cents per share) and R30 million (14
cents per share) compared to the R181 million (84 cents per share) earned in
the first half of 2008.
The company is making good progress with initiatives to improve cash
generation and has reduced its average borrowings by approximately R200
million since December 2008.
The expansion project remains on schedule and there are no changes to the R970
million cost estimate released in the annual results to December
2008.Outstanding payments on the expansion project amount to approximately
R100 million and it is expected that the remaining assets will be commissioned
by August 2009.
Hulamin has concluded the sale of its distribution business, Hulamin
Engineering Solutions, to Kulungile Metals Group, an existing distributor of
Hulamin`s rolled and extruded products in the South African market. The sale
is subject to approval by the Competition Commission.
Having withstood the severe contraction in business in the latter part of 2008
and early 2009, the business remains focused on achieving its long term growth
and profitability objectives.
The above information has not been reviewed or reported on by the company`s
auditors.
Cautionary Announcement
Shareholders are advised that Hulamin is in discussions with BHP Billiton, the
full impact of which is currently being determined and which may have an
effect on the price of the company`s securities. Accordingly, shareholders
are advised to exercise caution when dealing in the company`s securities until
a full announcement is made.
23 April 2009
Pietermaritzburg
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 23/04/2009 16:50:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
