Metair’s headline earnings tank by 56% due to COVID-19
Metair has reported a 56 per cent dive in headline earnings for the year ended December 2020 and a 9 per cent drop in revenue. The company’s profit dropped by 45 per cent due to a hike in costs and impairments. The Board declared a dividend of 75 cents per share for the 2020 financial year. Riaz Haffejee, CEO at Metair joins CNBC Africa for more.
Thu, 18 Mar 2021 20:44:28 GMT
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AI Generated Summary
- Metair faced a significant decline in earnings and revenue in 2020 due to the impact of the COVID-19 pandemic, with a 56 per cent drop in headline earnings and a 9 per cent reduction in revenue.
- Despite the challenges, Metair navigated through the pandemic by focusing on resilience and strategic decision-making, leading to a strong second half of the year and a positive outlook for 2021.
- The company anticipates a recovery in OEM and energy volumes, with a particular emphasis on exploring opportunities in the evolving battery market, including the shift towards lithium-ion batteries and renewable energy storage.
Metair, a leading auto parts and auto components company, faced significant challenges in 2020 due to the impact of the COVID-19 pandemic. The company reported a 56 per cent dive in headline earnings for the year ended December 2020, along with a 9 per cent drop in revenue. CEO Riaz Haffejee discussed how the company navigated through the challenges posed by the pandemic, highlighting the resilience and strategic decisions made to ensure a successful second half of the year.
The start of 2020 brought difficulties for Metair in the auto parts industry, as some OEMs struggled. Quarter two saw COVID-19 lockdowns in South Africa and around the world, resulting in a significant impact on the company's budget and outcomes. However, by quarter three, there was a noticeable recovery in South African OEM customers, particularly as global markets started to recover. The energy vertical, including battery supply companies in Turkey and Romania, also saw improvements as winter approached, traditionally a peak period for battery demand.
The company experienced a strong quarter four, surpassing 2019 volumes and providing a positive outlook for 2021. Haffejee indicated confidence in the year ahead, with expectations of reasonable OEM volumes and exceeding 2019 energy volumes. Despite challenges in export markets due to COVID-19, the company anticipates a solid recovery. Additionally, Metair is exploring opportunities in the evolving battery market, especially in the context of electric vehicle (EV) manufacturing in South Africa.
Looking ahead, Metair is considering the shift towards lithium-ion batteries and renewable energy storage, recognizing the growing importance of these technologies in addressing energy needs, particularly in regions like South Africa facing issues like load-shedding. The company aims to focus on the consumer market for batteries, with a strategic objective of potentially reducing costs and making energy storage solutions more accessible to a wider audience.
The future outlook for Metair appears promising, with the company positioned to capitalize on market trends and technological advancements. As the automotive industry evolves, including the growing focus on EVs and renewable energy, Metair is poised to leverage its expertise and strategic vision to drive growth and innovation in the coming years.