15 February
,
Press Release

South African producer of semi-finished and fabricated aluminium products Hulamin published audited results for the year ended 31 December 2009.
 
Market conditions for Hulamin’s products were challenging in all market sectors during the year, although some improvement was noted in international markets towards the end of the year. Annualised sales volumes are returning to pre-contraction levels, notwithstanding the unscheduled interruption to production at the Camps Drift hot mill in July due to the premature failure of a critical component.

Local demand and the global plate and brazing sheet markets remained weak throughout 2009 which led to the overall product mix shifting away from the niche, high value products towards more standard distributor type products. Poor demand in the first half of the year, together with the hot mill break down resulted in sales volumes for the year reducing by 20% to 159 000 tons. This, together with the effect of a lower average Rand aluminium price, resulted in turnover reducing from R7,1 billion to R4,5 billion.

Operating profi t reduced from R465 million to R244 million. Earnings in the second half of the year showed some improvement over the fi rst half despite the pronounced strengthening of the Rand against the US dollar. Attributable earnings for the year reduced from R268 million to R90 million ($11,6 mln)and headline earnings per share reduced from 124 cents to 42 cents.

Operating cash flow (before interest and tax) of R962 million benefited from a R599 million reduction in working capital. Inventories were reduced by 15 days (20%) and export debtors by 9 days (15%).

The net cash flow after dividends and capital expenditure, following the completion of the Rolled Products expansion, amounted to R338 million. Net borrowings reduced from R1 747 million to R1 409 million, which amounts to 38% of equity.

Hulamin is assessing a number of alternatives to optimise its capital structure. This may include raising equity capital as more appropriate longer term funding to support the continuing growth in rolled products sales.

Consequently, the board has decided not to declare a dividend for the 2009 financial year.