Hulamin (HLM) H2 2024 earnings summary

Executive summary

• Achieved a record low Lost Time Injury Frequency Rate below 0.1x, with zero fatalities and a 28% reduction in LTIFR over five years, highlighting ongoing safety improvements.

• Sales volumes increased 2% year-over-year to 173,167 tons, despite operational disruptions from a fire at the can end finishing line.

• Local sales accounted for 55% of total, with export sales impacted by weaker mix and fire-related capacity loss; local market prioritized.

• Strategic focus on high-margin products, wide can body sheet (CBS) investment, and increased scrap utilization.

• Liquidity protection and inventory build remain priorities amid operational challenges.

Financial highlights

• Group sales volume rose 2% year-over-year to 183,103 tons; rolled products sales volume up 2% to 173,167 tons.

• Normalized EBITDA reached ZAR 544 million; normalized EBIT was ZAR 379 million, down 22% year-over-year.

• Revenue declined 1% to ZAR 13,635 million due to weaker sales mix after the fire.

• Net debt increased 65% to ZAR 1,328 million, with ZAR 700 million headroom on a ZAR 2 billion facility.

• CapEx spend was ZAR 569 million, with ZAR 295 million allocated to expansion and improvement.

Outlook and guidance

• Focus on liquidity protection, inventory build for a 25-day strategic shutdown in June 2025, and operational efficiency.

• Net debt expected to rise in H1 2025, then decrease as inventory is offloaded post-shutdown.

• Wide can body project final phase to complete in July 2025; ramp-up to full volume expected in 6–8 months.

• Strategic review of non-performing assets to be completed by H1 2025.

• Return on capital expected to exceed WACC by late 2027, with margin improvements starting in 2026.