Metair half-year revenue up 31% to R7.76bn
Metair’s first-half profit dropped 9 per cent as high finance charges more than doubled in the period, reversing the bottom line. The automotive parts and energy storage group said demand from OEMs improved in the period and it successfully launched the production of the Ford new Ranger. Sjoerd Douwenga, CEO, Metair joins CNBC Africa for more.
Thu, 14 Sep 2023 11:45:14 GMT
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AI Generated Summary
- Metair reported a 9% drop in first-half profits due to high finance charges, despite an improvement in demand from OEMs and the successful launch of the Ford New Ranger.
- The company is navigating challenges posed by high interest rates and complexities in managing working capital, particularly in regions like Turkey.
- Metair made the decision to exit the Russian market due to sanctions on automotive batteries and is exploring new export markets while remaining committed to delivering sustainable returns to shareholders.
Metair, a leading automotive parts and energy storage group, reported a 9% drop in first-half profits due to high finance charges that more than doubled during the period. Despite the challenging financial environment, the company indicated an improvement in demand from original equipment manufacturers. Metair also successfully launched the production of the new Ford Ranger, marking a significant milestone for the company. Sjoerd Douwenga, the CEO of Metair, discussed the financial performance and future outlook of the company in an interview with CNBC Africa. Douwenga highlighted the impact of the higher interest rates on the company's earnings and emphasized the need for a proactive approach to managing finance in the current economic climate. He mentioned that while the interest rate environment is challenging, the company is focused on balancing operational efficiency with customer demand and reducing working capital complexities. Douwenga also discussed the company's commitment to Turkey and the ongoing evaluation of its portfolio in light of the difficult operating environment in the region. In response to challenges in Russia, Metair decided to exit the market due to sanctions on automotive batteries. The company is exploring new export markets to compensate for the loss of Russian sales. Despite these challenges, Douwenga expressed confidence in the company's ability to navigate geopolitical risks and focus on markets with lower barriers. The interview also touched on Metair's significant investment in launching the Ford New Ranger and the expected returns for shareholders. While the project incurred substantial upfront costs and complexities, the company remains committed to delivering sustainable returns over the long term. Looking ahead, Douwenga expressed confidence in Metair's ability to meet investor expectations and deliver on its promises. The discussion concluded with a mention of Stellantis' investment in South Africa's automotive sector and its potential impact on Metair. The investment presents an opportunity for Metair to expand its market share and become a major supplier to Stellantis. Douwenga highlighted the positive implications of this investment for the industry and expressed optimism about the company's potential growth.
