Motus H1 HEPS slump 27%

Motus, a key player in the automotive industry, has faced a challenging first half of the year, as indicated by their recent financial results. The CEO, Osman Arbee, recently sat down for an interview with CNBC Africa to delve into the company's performance and shed light on the various obstacles they are encountering in the current economic climate. The overarching theme of the conversation centered around the impact of high interest rates and a struggling economy on Motus' operations. Arbee highlighted that while the company managed to achieve turnover and EBITDA growth, a significant increase in the interest bill has led to a 27% decline in attributable income. He emphasized that the tough economic conditions in South Africa, including high interest rates, load shedding, and high unemployment, have made the new car sales environment intensely competitive. Key Points: 1. Economic Challenges and Consumer Behavior Motus has seen growth in turnover and EBITDA, but the burden of a high interest bill has hampered overall performance. Arbee mentioned that South Africa's new car market has become highly competitive due to a combination of factors, such as fragile consumer confidence, load shedding, and high unemployment. Consumers are opting for lower-priced vehicles, reflecting cautious spending behavior amid economic uncertainties. 2. Future Prospects and Economic Outlook Looking ahead, Arbee expressed cautious optimism about the potential improvement in the economic environment post-June. He underscored the need for substantial interest rate cuts to positively impact consumer spending on vehicles. Additionally, a more stable currency and conducive business environment are essential factors for the sustained growth of the automotive sector in South Africa. 3. Expansion Strategies and Market Constraints Arbee discussed the challenges faced by Motus in the South African market regarding acquisitions and consolidation. Regulatory constraints, such as Competition Commission approvals and OEM restrictions, limit the company's expansion opportunities within the country. As a result, Motus is exploring bolt-on acquisitions in the UK and Australia where market conditions are more favorable and approvals are faster. Quote: Osman Arbee summed up the current situation by stating, "It's not about the supply. It's about the demand from the consumer that's restraining the South African economy." He emphasized the need for fundamental changes, including lower interest rates, a stable currency, and job creation, to stimulate the automotive industry in South Africa. In conclusion, Motus continues to navigate a challenging operating landscape marked by economic uncertainties and regulatory hurdles. The insights shared by Osman Arbee offer a glimpse into the complexities faced by key players in the automotive sector and underscore the importance of a conducive business environment for sustained growth and profitability.