JOHANNESBURG (miningweekly.com) – JSE-listed Insimbi Refractory and Alloys’ earnings before interest, taxes, depreciation and amortisation increased by 273% year-on-year to R179.8-million for the six months ended August 31.
Earnings a share were up by 142% year-on-year to 11.97c and headline earnings a share increased by 150% year-on-year to 11.95c.
Speaking at a presentation of the company’s results, in Johannesburg, on Thursday, CEO Fred Botha said the company’s performance in the first half of the 2018 financial year had been satisfactory.
“Group revenue for the period was R1.67-billion, an increase of 247%, or R1.19-billion, on the comparative period,” he said, adding that this was mainly attributable to the successful acquisition of Amalgamated Metal Group Holdings (AMGH).
He noted that, as a result of the lower margins in AMGH, overall gross margins decreased from 14% to 11% but gross profit had increased by 162% from R68.6-million to R179.8-million.
Group operating profit increased by 289% to R77.3-million, compared with R19.9-million in the comparative period of 2016, while group operating costs increased by R56.2-million to R105.9-million.
“The conclusion of the transaction at the end of last year is now contributing positively to all aspects of the business,” said Botha.
AMGH’s volumes were up by more than 10% year-on-year, which, combined with higher metal prices, contributed to an “exceptional” six months.
Despite a lacklustre first quarter, a strong second quarter resulted in Insimbi Alloy Supplies’ performance for the six months to August 31 exceeding that of the comparative period in 2016.
“Stock levels were consistently better and a renewed enthusiasm within this operation is evident,” the company said.
Meanwhile, Botha said the steel industry was showing signs of improvement, while the ferrous and nonferrous segments had shown significant growth.
“The refractory operations are performing well although revenues are down as a result of the loss of volume, but margins are trending higher,” he noted.
He added that the plastics business had shown an improved performance year-on-year. Further, the company had expanded the business by establishing manufacturing capacity in KwaZulu-Natal. Manufacturing capacity will also soon be established in the Western Cape.