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Operational Update
HULAMIN LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1940/013924/06
JSE Code: HLM
ISIN: ZAE000096210
(“Hulamin”, the “Group” or the “Company”)
OPERATIONAL UPDATE
The objective of this announcement is to give stakeholders an update on Hulamin’s operational
performance following the end of the third quarter of the 2020 financial year, updates on demand for
Hulamin products and order books, feedback on the preliminary outcome of the US anti-dumping
duties against South Africa and Hulamin Rolled Products, as well as a liquidity status update.
Up to the end of September 2020, Hulamin recorded 497 positive Covid-19 tests. Hulamin
management teams have subsequently returned to on-site working arrangements on a full-time basis.
It is a Hulamin requirement to have a negative Covid-19 test result to enter site. Returning to on-site
working has therefore resulted in additional tests being conducted. There has been one new Covid-19
test result in October 2020; 4 employees remain quarantined and will conclude their isolation periods
shortly.
In mid-September 2020, Hulamin reported its first half financial results performance. The table below
summarizes the first half sales already reported as well as the improvement in sales in Q3:
Group Rolled Products
Q1 Sales 41 000 38 000
Q1 Sales Annualized 165 000 153 000
Q2 Sales 29 000 28 000
Q2 Sales Annualized 116 000 112 000
Q3 Sales 45 000 42 000
Q3 Sales Annualized 179 000 166 000
Order books in all operations have continued to improve through Q3 of 2020 and are approaching
normal levels, based on recent years. Confirmed orders for beverage can products, heat-treated plate
and extrusions are particularly healthy.
On Thursday, 8 October 2020, the USA Department of Commerce announced the preliminary outcome
in the anti-dumping case instituted by the US Aluminum Association against 38 rolling operations from
18 countries. These duties, which become enforceable immediately, range from 0% for Italy to 353%
for Germany. The anti-dumping duty to be implemented for common alloy aluminium rolled products
from South Africa is 8.98%. There are 7 countries with import duties lower than South Africa,
representing some 170 000 tons imported into the USA in 2019. There are 23 represented rolling mills
facing higher anti-dumping duties than Hulamin. In 2019, these mills exported a combined 392 000
tons into the USA. Over the past 2 years, Hulamin exported between 32 000 and 36 000 tons annually
into the USA of products affected by this case.
Debt increased by R337 million in the first half of 2020 and reached a debt:equity level of 27%.
Subsequent increases in production and sales activity has further increased pressure on working
capital. Nevertheless, borrowing levels remain well within facility limits, with sufficient headroom.
No relaxation of covenants is likely to be required.
The information contained in this operational update has not been reviewed and reported on by the
Company’s external auditors.
Pietermaritzburg
14 October 2020
Sponsor
Questco Corporate Advisory Proprietary Limited
Date: 14-10-2020 11:30:00
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