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HLM
HLM
HLM - Hulamin Limited - Chairman`s Statement
Hulamin Limited
Incorporated in the Republic of South Africa
(Registration number: 1940/013924/06)
ISIN: ZAE000096210
Share Code: HLM
("Hulamin" or "the company")
CHAIRMAN`S STATEMENT
Chairman Mafika Mkwanazi made the following remarks at the seventieth annual
general meeting of shareholders held today.
"The positive developments that emerged towards the end of 2009 have continued
into 2010 and Hulamin is steadily resuming its growth trend in pursuit of its
medium term objectives.
While the domestic market remains weak, international markets are showing a
more robust recovery across a wide range of products including some of
Hulamin`s preferred product/market sectors.
Following the completion of the Rolled Products expansion project towards the
end of 2009, Hulamin`s fixed cost base has increased as the full operating
costs of the related machine centers are now being incurred. Output from
these assets is improving steadily while the qualification and progression to
more demanding products is also under way and will lead to a positive
contribution to earnings in the months ahead.
The expansion of Hulamin`s slab production capacity has commenced and the
first phase is expected to be completed by the end of the year. Discussions
with BHP Billiton regarding the supply of rolling slab are also continuing and
the closure of the Bayside casthouse has been extended by a further six months
to June 2011. These developments will ensure continuity of supply during the
transition towards more reliance on internally produced slab, and will also
enable Hulamin to achieve sustained growth in output into 2011 which would
otherwise have been at risk.
As reported at the time of the 2009 results announcement, the Board has
reviewed the capital structure of the business and it has now decided to raise
R750 million by way of a rights issue to shareholders. This capital raising
has been positively supported by shareholders and will ensure that the
company`s funding structure is well aligned with its growth and operational
objectives.
With 70% of its output being exported, the business is being affected by the
Transnet strike and it is hoped that this matter is resolved timeously. The
continuing strength of the Rand against the major currencies is also impacting
the business negatively. The consequences for the local economy are of concern
and Hulamin is supporting the initiatives by industry to engage with all the
stakeholders on the matter.
The Board has been pleased to announce the appointment of Richard Jacob to
take over as Chief Executive Officer of Hulamin when Alan Fourie retires in
June. Alan has served on the Hulamin Board for 25 years and in the capacities
of Managing Director and CEO for the last 8 years. We thank him for his
contribution to Hulamin`s emergence as a successful global producer and have
every confidence that there will be a smooth transition as Richard prepares to
lead the business through the next phase of its development."
Pietermaritzburg
19 May 2010
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 19/05/2010 17:26:01 Produced by the JSE SENS Department.
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