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Results Headlines

•     Revenue decreased by 1% to R5.25 billion

•     Headline earnings down 174% to a loss of R63 million, impacted by losses in Hulamin Extrusions,       restructuring costs and a negative metal price lag

•     Normalised headline earnings per share (note 2) of 10 cents (down 9 cents per share)

•     Negative free cash flow (note 3) of R168 million, due to inventory build

•     Balance sheet remains robust, with net debt to equity of 16%

•     Turnaround actions in progress


Results Overview

‘Hulamin experienced challenging trading conditions during the first six months of 2019. Export sales to the United States were disrupted by blockages in our distribution channel, customer overstocking, and a softening underlying market. This disturbed the balance between material purchases and sales resulting in an increase in work-in-progress and finished goods stocks, and the consequent absorption of cash. We have taken the required corrective actions and, as a result, working capital reduction has already become evident.

Hulamin Extrusions suffered a first-half loss, which includes a provision for restructuring costs. Sales volumes were lower following an equipment malfunction and the consequent disruption to  production.

We are making good progress in rightsizing the business to achieve a lower unit cost base; turning the losses around and releasing cash.

We are taking action to improve profitability levels in the months ahead through cost reductions and actions to achieve higher sales volumes and prices.’

Richard Jacob, Hulamin Chief Executive Officer


Financial Headlines

The unaudited results for the half year ended 30 June 2019 (‘current period’ or ‘H1 2019), as compared to the restated half year ended 30 June 2018 (‘comparative period’ or ‘H1 2018’), are set out below:



                                                             H1 2019                       H1 2018



                                                                    Percentage        Restated (Note 1)




    Revenue (R billion)                             R5.25              -1%                   R5.29

    Operating (loss) / profit (R million)          (R77.7)             -149%                R158.5

    Basic (loss) / earnings per share (cents)        (23)              -185%                  27

    Basic headline (loss) / earnings per share       (20)              -174%                  27


    Normalised headline earnings per share            10                -47%                  19

    (cents) (note 2)


No dividend was declared in respect of H1 2019 nor was a dividend declared in respect of the comparative period. Dividends are only considered on an annual basis.


Note 1: Restated information

The Group reviewed the application of hedge accounting in terms of the IAS 39 standard during the

finalisation of the 2018 annual financial statements. This resulted in the restatement of the 2017 annual financial statements following a timing adjustment between the 2017 and 2018 results, and similarly requires a restatement of the previously reported results for H1 2018.

There is no cumulative impact on earnings and also no impact on cash resulting from this restatement. Hulamin’s commodity risk management programme is effective. Hulamin adopted the hedge accounting provisions of the new financial instruments standard IFRS 9 in 2019, which will overcome the limitations of IAS 39.

Full details of the restatement are provided in Hulamin’s H1 2019 results which are available on the links detailed below.

Note 2: Normalised headline earnings per share (‘HEPS’)

Normalised HEPS is one of the measures which the Hulamin Executive Committee uses in assessing financial performance and is calculated in a consistent manner as per the latest annual financial statements, by dividing normalised headline earnings by the weighted average number of ordinary shares in issue during the year. Normalised headline earnings is defined as headline earnings  excluding

(i) metal price lag and (ii) material non-trading expense or income items which, due to their irregular occurrence, are adjusted for in order to better present earnings attributable to the ongoing activities of the Group.

In the current period, normalised HEPS includes an adjustment for restructuring costs and the timing impact of a highly effective commodity risk management programme not qualifying for hedge accounting as at 31 December 2018 due to the limitations of IAS 39.

The presentation of normalised HEPS is not an IFRS requirement and may not be directly comparable with the same or similar measures disclosed by other companies.

Note 3: The cash flow generated from operations and cash flow from investing activities, which equates to cash flows before financing activities of Hulamin (‘free cash flow’), was impacted in the fourth quarter of 2018 by a customer payment of R208 million that was due to the group and was fully authorised by the customer and scheduled to be paid on 31 December 2018 but was only concluded in early January 2019. The directors of Hulamin felt that this anomaly misrepresented the group’s cash flows for the 2018 financial year and therefore presented an additional measure in the 2018 results, ‘free cash flow (adjusted)’, which represented free cash flow adjusted for the impact of the inclusion of the customer payment referred to above. Free cash flow in the current period, excluding this customer payment, would have amounted to an outflow of R376 million.

This short form announcement is the responsibility of the Board and does not contain full or complete details. Any investment decisions by investors and/or shareholders should be based as a whole on consideration of the condensed consolidated unaudited interim financial results for H1 2019 which may be downloaded from  https://senspdf.jse.co.za/documents/2019/jse/isse/HLM/June19Int.pdf) or Hulamin’s investor website (http://ir.hulamin.com), or may be viewed, at no cost, at the registered office of the Company and the Johannesburg office of its Sponsor, during ordinary business hours, for a period of 30 calendar days following the date of this announcement.

Registered office: Moses Mabhida Road, Pietermaritzburg



23 August 2019


 Click here to see the full pdf press release