Alumex PLC, the Hayleys group aluminium extrusions manufacturer, returned to profit during the three months ended December 31, 2019 (3Q20), as the global aluminium prices fell and the firm reduced its finance costs.
The premier manufacturer of aluminium extrusions, which is making inroads into the South Asian region with exports, reported earnings of 9 cents a share or Rs.27.5 million for the quarter under review, compared to a loss of 21 cents a share or Rs.63.4 million reported for the corresponding period of the previous year.
The top line, net of the Nation Building Tax, for the three months was Rs.1.28 billion, a 3 percent decline compared to the same period, last year.
The company’s business slowed from the delay in major public and private sector projects as the economy stagnated and the construction sector lagged.
During the previous financial year, the company entered Nepal, Myanmar, the Seychelles and Kenya while exploring opportunities in India and the Maldives.
The firm’s direct costs fell by 11 percent year-on-year (YoY) to Rs.934.4 million during the quarter under review.
Alumex received a clear tailwind from lower aluminium prices in the global market during 2019. The global aluminium prices have trended down through 2019 and have remained below US $ 1,850 a metric tonne during most months.
The global prices have further eased so far this year and have come under US $ 1,700 a metric tonne this week, proving a further tailwind for the manufacturers in the industry.
The less volatile rupee, compared to 2018, may have also helped the company to record low import costs.
The firm’s bottom line was further supported by the substantially lower finance cost, which came down to Rs.89.2 million, from Rs.151.4 million YoY.
The company was seen settling its short-term loans and the earnings were also supported by the general decline in the lending rates in the market.
The company during the last financial year expanded its capacity by commissioning an extrusion plant in Ekala, which added 1,000 metric tonnes in capacity, bringing the total annual capacity up to 22,000 metric tonnes.
Meanwhile, for the nine months ended December 31, 2019, the firm’s earnings and revenues remained flat.
The earnings were 10 cents a share or Rs.29.1 million while the revenue stood at Rs.3.66 billion.
As at December 31, 2019, Hayleys PLC held a 52.59 percent stake in Alumex followed by Akbar Brothers Private Limited with a 13.57 percent stake.