Insimbi results satisfactory despite flat market conditions - CNBC Africa

Insimbi results satisfactory despite flat market conditions


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Rolls of Steel. PHOTO: Getty Images

[DATA ISB:Insimbi Refactory and Alloys Supplies Ltd.], a supplier of alloys and other materials to the steel and cement industries, posted a 1.3 per cent decrease in revenue from 483.9 million rand in 2012 to 477.6 million rand this year.

Insimbi released its financial results for the six months ended 31 August 2013.

“The interim results under review has shown a satisfactory performance in a market with its challenges that remained flat with commodity prices showing a downwards trend and a relative slow demand,” said the Insimbi group in a statement released on Friday.

The challenges that slowed down growth for the group include a lack of government spending on infrastructure, slower activity in the mining and related industries as well as a volatile currency.

Operating profit lowered slightly from 19.1 million rand in 2012 to 19 million rand in 2013 while headline earnings per share took a knock from 4.72 cents per share last year to 4.48 cents per share in 2013.

On the other hand, gross profit increased by 4.1 per cent to 52.1 million rand reflecting improved margins for the period. Profit before taxation was also 0.6 per cent higher when compared to 2012.

Net cash from operations increased 33.6 per cent to 24.8 million rand and the group declared an interim dividend of 1 cent per share.

The company stated that they expect economic conditions in South Africa to remain under pressure for the year ahead, resulting in a weak demand for steel locally.

However the World Steel Association has predicted that global steel use will increase to 3.1 per cent this year and a further 3.3 per cent for next year.

Also, steel demand in developed economies is expected to return to positive growth in 2014.

The group stated that they will be focusing on targeting emerging markets and they believe that with a number of new products and projects in the pipeline, they are confident that the company will achieve satisfactory organic growth in the years to come.

“Insimbi will continue targeting markets that are considered to be emerging and the group will focus on these markets. We have a diverse range of products on offering and with both secondary aluminium smelters running to full capacity  and with a very healthy order book the prospects are looking good for the balance of 2013/14 financial year,” said the group.

“With a number of new products and exciting projects I am confident that the group will continue to achieve satisfactory organic growth in years to come. We remain cautiously optimistic about the outlook for the balance of this financial year as we actively look for acquisitive growth opportunities.