Hulamin predicts strong performance

Johannesburg - In a trading statement for the year ended 31 December 2016 Hulamin [JSE:HLM] said a strong manufacturing performance in 2016 supported the delivery of record sales volumes.

Hulamin performed particularly well in the second half of the year, despite the strengthening of the rand, to deliver a record operating profit for the full year.

The company said in a Sens statement that Hulamin Rolled Products has benefitted from consistent investment in operational excellence and risk management to achieve record sales volumes of 214 000 tonnes for the year under review. There were strong improvements in yields/recoveries, unit costs and in the mix of high value products, particularly can end stock and heat treated plate.

This positive momentum, achieved with an excellent safety record, provides a solid base for further focus and improvements going into 2017.

Local sales of rolled products increased to more than 70 000 tonnes. Sales of can body stock improved strongly in the second half after the slow start to 2016. This increase in demand allowed for an increase in scrap purchases and improved utilisation of Hulamin's recycling capacity in the second half.

Hulamin Extrusions and Hulamin Containers also both performed better in 2016.

The improved profit performance and capital discipline allowed Hulamin to improve cash flows further in the second half resulting in Hulamin reducing its net borrowings further by some R350m after closing at R952m at the end of June 2016.

Hulamin said it is focused on maintaining the positive momentum in the business, increasing rolling margins (selling prices), improving operational performance and making further reductions in manufacturing cost.

The financial information on which the trading statement is based has not been reviewed and reported on by the company's external auditors. Hulamin's results for the year ended 31 December 2016 are expected to be released on or about 27 February 2017.