Metair Investments (MTA) H2 2024 earnings summary

Executive summary

• Navigated a challenging year marked by lower OEM production, port infrastructure issues, and hyperinflation in Turkey impacting Mutlu.

• Undertook significant restructuring, including plant closures, strategic exit from Mutlu, and closure of non-core operations, incurring ZAR 41 million in restructuring costs.

• Acquired AutoZone, shifting focus toward aftermarket sales to reduce OEM dependency and diversify revenue streams.

• Achieved a turnaround at Hesto, moving from a ZAR 608 million EBIT loss to a ZAR 257 million profit at a 4.7% margin.

• Debt refinanced and split into two ringfenced packages, providing stability and runway for growth.

Financial highlights

• Revenue declined 2% year-over-year to ZAR 11.8 billion.

• EBITDA decreased 8% to ZAR 844 million, impacted by restructuring costs.

• EBIT from continuing operations increased 28% to ZAR 603 million, but operational EBIT declined 20% to ZAR 504 million after adjusting for capital items.

• Net profit from continuing operations rose to ZAR 282 million from ZAR 55 million in the prior year.

• Headline earnings per share (HEPS) declined 9% to ZAR 0.89.

• Free cash flow improved to ZAR 776 million from ZAR 306 million.

• Net asset value per share dropped to ZAR 13.88, mainly due to the ZAR 4 billion loss on Mutlu.

Outlook and guidance

• No major volume increases expected from automotive OEM customers over the next two years; budgeting conservatively.

• Growth focus is on expanding aftermarket revenue, targeting a long-term goal of up to 50% of group revenue and African expansion.

• AutoZone integration and turnaround are critical priorities, with expectations to exceed breakeven in 2025.

• Continued focus on cost reduction, operational efficiency, and capital discipline.

• Ongoing closure of non-core operations and rightsizing to manage volume risk.