| Mon 3 Aug 2026, 7:05 | | METAIR INVESTMENTS LIMITED - Trading update and trading statement for the six months ended 30 June 2026 |
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Trading update and trading statement for the six months ended 30 June 2026
METAIR INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1948/031013/06
ISIN: ZAE000090692
JSE and A2X share code: MTA
("Metair" or the "Company" or the "Group")
TRADING UPDATE AND TRADING STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2026
TRADING UPDATE
Introduction
South Africa's new-vehicle market saw robust growth in H1 2026 ("H1 2026" or the "Interim Period"),
recording 315 303 new units sold from January through June, with sales increasing by 12.9% compared
with the same period in 2025, buoyed by the strongest June sales performance in 19 years. While the
original equipment manufacturer ("OEM") markets supplied by Metair derived some benefit from this
uplift, most of the increase in vehicle sales was attributable to imports from Chinese and Indian
automotive brands, which continue to put pressure on the locally manufactured vehicle market. Local
OEMs also had to contend with lower vehicle exports, which declined by 7.8% year-on-year for the first
six months of the year, to 181 731 units. Overall production of passenger and light commercial vehicles
by South African OEMs remained fairly flat period-on-period. In addition, although conditions in the
aftermarket remained challenging, signs of improvement have recently emerged.
Metair has successfully undertaken substantial work to improve its flexibility and adaptability over the
past two and a half years, and all major restructuring is substantially complete, subject to market
conditions. In April 2026, the SA Obligor debt package was refinanced extending the term of the entire
package for five years. As a result, the Group's overall risk profile has improved. We are also pleased
to report that the long-anticipated model change by a key customer implemented by OEMs during H1
2026 has been successful and seamless.
Despite local OEM production growth remaining subdued, due to lower volumes primarily from one key
customer offset to an extent by higher volumes from the Group's other OEM customers, Group revenue
is expected to be marginally higher period-on-period (H1 2025: R8.5 billion*). Earnings before interest
and taxation ("EBIT") is also expected to increase marginally period-on-period. EBIT has benefited from
efficiency and cost savings initiatives and the inclusion of Harnesses Proprietary Limited (Hesto) for the
full six months of H1 2026.
Segmental Results
OEM segment
OEM revenue, including Hesto, for H1 2026 is expected to increase by between 3% and 6% (H1 2025: R
5.5 billion), with EBIT margin marginally higher than the prior period (H1 2025: 7%) despite the net
lower volumes from our key OEM customers. The EBIT margin has been maintained through ongoing
cost-reduction and operational-improvement initiatives implemented during the half year and carried
forward from the prior six months. Hesto's revenue is expected to decline by between 15-20% and its
EBIT margin is expected to decline by approximately 1% to 2% (H1 2025: 6.9%) largely due to the lower
volumes.
AFM Segment
Revenue from the Aftermarket Parts and Retail Africa ("AFM") segment is expected to increase by
between 5% and 7% (H1 2025: R1.8 billion*), which reflects progress on AutoZone's turnaround
strategy but a flat performance at First Battery due to challenging market conditions. AFM Africa's EBIT
is expected to hold steady (H12025: R54 million*) due to challenging conditions in the aftermarket sector
and expected operating losses from AutoZone. Autozone has returned to profitability from May onwards
albeit that the recovery remains approximately six months behind original expectations as previously
reported. Despite lower revenue expected of between 20%-25%, Rombat should manage to hold EBIT
steady.
Financial Position
As announced on SENS on 4 May 2026, the board of directors of Metair ("Board") and Metair's principal
lender, The Standard Bank of South Africa Limited, approved a refinancing of the current debt package
housed within the South African subsidiaries excluding Hesto ("SA Obligor"). The Refinancing extends
the term of the entire R3.3 billion to five years, which allows for a repayment profile that matches
expected earnings growth and cash flows. Metair further benefits from a reduction in interest rates which
will ratchet downward as leverage levels decline.
A primary objective of the Refinance was to address the maturity of the R1.6 billion Subordinated Loan
(Facility C) which formed part of the original SA Obligor facility, due and payable by 30 June 2027. This
facility was converted into a conventional senior term loan repayable over five years, thereby enhancing
the sustainability of the SA Obligor's capital structure. Metair is also finalising a refinance at Hesto,
where SBSA will become the sole lender.
Management continues to monitor the debt levels and liquidity closely to ensure that all covenants are
met over the remaining periods of the debt package.
Outlook and Prospects
Despite challenging market conditions, Metair is pleased with its operational and financial performance
and resilience during the Interim Period particularly given the net decrease in local OEM volumes for
the two major customers served by Metair. The strategic reset is substantially complete, and the balance
sheet has stabilised. AutoZone's turnaround remains a near-term priority, and it is already showing
signs of improvement. The Group is actively engaging with potential new market entrants on localisation
opportunities.
As a result of our current restructuring at First Battery, NUMSA implemented a strike on 6 July 2026
over a number of disputes. The strike was suspended on 23 July 2026 with various unresolved issues
currently being negotiated and settled.
Metair and Rombat have lodged an appeal relating to the EURO 20.2 million fine imposed in FY2025,
and the process is likely to take up to two years to reach finality. Rombat is in the process of furnishing
a guarantee as security for the first instalment following the outcome of an Interim Measures Application
which was dismissed by the European Courts. The fine was fully provided for in FY2025.
As reported previously, strategic government decisions in the near term are pivotal to sustaining and
growing production levels, with stakeholder collaboration required to strengthen local manufacturing
competitiveness, support localisation and CKD manufacturing, and protect and diversify export markets
as well as fix structural constraints
TRADING STATEMENT
In terms of paragraph 6.26 of the JSE Limited Listings Requirements, companies are required to publish
a trading statement as soon as they are reasonably certain that the financial results for the period to be
reported upon next, will differ by at least 20% from the published financial results for the previous
corresponding period.
The accounting treatment of Hesto as a subsidiary with effect from 1 April 2025 resulted in the
recognition of a significant once-off net capital loss of R306 million in H1 2025, primarily attributable to
the recognition of Hesto's accumulated losses that had not previously been recognised. As this
represents a non-recurring accounting adjustment, it will not impact the 2026 financial results. This item
is excluded in the calculation of headline earnings per share ("HEPS") but is included in the calculation
of earnings per share ("EPS").
Metair is in the process of finalising its financial results for H1 2026, and Metair shareholders are
accordingly advised as follows:
Total earnings guidance including discontinued operations
In respect of the Group's total earnings, the Company expects to report:
• HEPS of between 70 cents and 75 cents (H1 2025: 65 cents) being an improvement of between
7% and 15%; and
• EPS of between 65 cents and 75 cents (H1 2025: loss per share of 93 cents).
Earnings guidance from continuing operations
In respect of the Group's earnings from continuing operations, the Company expects to report:
• HEPS of between 70 cents and 75 cents (H1 2025: 68 cents*), being an improvement of
between 3% and 11%; and
• EPS of between 65 cents and 75 cents (H1 2025: loss per share of 90 cents*).
* H1 2025 reported revenue and EBIT have been re-presented for the two divisions (Dynamic Batteries
and First Battery Industrial division) which were classified as discontinued operations in the second half
of the 2025 financial year in accordance with International Financial Reporting Standard 5 –
Discontinued Operations.
** EBIT - calculated as operating profit before interest and taxation but excluding the impact of capital
items (the Rombat fine, impairment of non-financial assets, and profit / loss on disposals and
acquisitions).
The pro forma financial information included in this announcement has been prepared in accordance
with the Group's accounting policies, is provided for illustrative purposes only and, because of its nature,
may not fairly represent the financial performance of the Group.
The financial information contained in this announcement is the responsibility of the Board and has not
been audited, reviewed, or reported on by the Group's external auditors.
The interim financial results are expected to be published on or about Wednesday, 26 August 2026.
3 August 2026
Johannesburg
Sponsor
One Capital
Date: 03-08-2026 07:05:00
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