The group is focused on new model launches and has approved a big investment to support new vehicle projects.
Metair has held back on an interim dividend after the Covid-19 pandemic resulted in a big decline in volumes and a drop in operating profit. And it’s still deferring payment of the 120c final dividend for 2019 that it declared in March to support its liquidity requirements.
The energy storage and automotive components group said its performance for the six months to end-June was subdued due to the disruption caused by Covid-19 lockdowns in its key markets. The auto components business, which gets most of its revenue from Original Equipment Manufacturers (OEMs) in SA, was particularly affected by a 42% drop in OEM production. First-quarter volumes were also impacted by a strike at one of its customers. Revenue from the division fell by 38% to R1.8 billion and it reported an operating loss of R48 million.
While revenue at its Energy Storage division fell 19% to R2.5 billion, it reported an operating profit of R74 million, supported by its Mutlu Akü and Rombat battery businesses in Turkey and Romania.
Group revenue fell 27% to R3.9 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) declined to R139 million. It reported an operating loss of R18 million and a headline loss per share of 56c. Cash generation remained strong, however, rising 27% to R221 million. It said its solvency and liquidity position remained strong with sufficient cash and available debt facilities to meet its obligations and support growth projects.
Metair said its Vision 2022 strategy would support its recovery post the pandemic as it focused on new model launches as well as its most sustainable projects, customers, models, and markets. It has already approved a R1.3 billion investment to support new projects that can deliver between R25 billion and R28 billion of turnover over a 7-year period starting in 2022, depending on the final project volumes and product designs. It said further model launches and planned model facelifts could also have a positive effect on the local automotive sector, even in the short term.
“Our timely Covid-19 response strategy has served us well to date and maps a plan for recovery in both our business verticals with both verticals showing good prospects for a second half rebound,” CEO Theo Loock said. As lockdown conditions have eased, trading levels have increased, we have seen good aftermarket demand and exports out of key markets are improving.
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