JSE-listed aluminium producer Hulamin’s earnings a share increased to 48c apiece for the six months ended June 30, compared with the 24c a share recorded in the six months to June 30, 2015.

Headline earnings a share increased to 48c apiece in the six months under review, compared with the 25c recorded in the first half of the prior financial year.

Hulamin CEO Richard Jacob said in a statement on Monday that improved manufacturing performance by Hulamin Rolled Products underpinned the “pleasing set of results”.

Speaking to Engineering News Online in a telephone interview, he highlighted that he was “not surprised by the strong results”, as the operations in South Africa meant that most costs were in rand, while it gained from its exports and the stronger US dollar.

“Our manufacturing operations also performed well. This mitigated the effects of [weak markets], local inflation and softer rolling margins,” he said.

Asked whether the company could weather a stronger rand/dollar exchange rate, Jacob pointed out that Hulamin had, in the past year, focused on improving its manufacturing operations to ensure better efficiencies and lower unit costs, aimed at protecting the business from volatility.

Manufacturing conversion costs in rolled products were 4% lower on a per unit cost basis in spite of higher dollar denominated costs, particularly imported liquid petroleum gas, higher electricity prices and the consolidation of costs in its R100-million investment in Isizinda Aluminium.

The metal price lag improved by R60-million, from a loss of R55-million in the corresponding period to a profit of R5-million in the current period.

Earnings before interest and taxation, at R257-million, were 86% higher year-on-year and operating profit before metal price lag was 31% higher at R252-million.

For the balance of the year, Hulamin expected its can body stock volumes to increase in both local and export markets, allowing it to source more scrap metal units locally.

Group sales volumes for the six months to June 30 reached110 649 t, 19% higher than in the corresponding period the year before.

Hulamin’s turnover increased to R4.9-billion, compared with R3.9-billion in the prior comparable period, driven by the higher sales volume and a weaker rand.

Locally, the economy remained weak during the first six months of the year and trended weaker as the period progressed. “Demand for beverage can stock products in the local market failed to meet forecast demand, resulting in lower procurement of used beverage can scrap metal units,” the company said in a statement.

Jacob added that, while the local market remained under pressure, owing to a downturn in the local resources market, he believed this would turn around, which would add to a better economy. “However, I don’t see much improvement until 2017,” he said.

Although local sales demand was forecast to improve in the second half of this year, Hulamin secured additional sales of export can stock to mitigate this market risk. Sales of export can end and tab stock increased by 51%.