Metair is still very much open for business and the group is able to accommodate new clients should they need automotive components or energy solutions, says new CEO Paul O’Flaherty.

O’Flaherty, now two months into the job after former CEO Sjoerd Douwenga bowed out owing to health reasons, comes to Metair with executive experience at companies such as Absa, Group Five, ArcelorMittal and Eskom.

His appointment follows ongoing challenges at Metair’s Mutlu battery business in Türkiye and its Hesto Harnesses component subsidiary in South Africa, as well as a looming European competition commission investigation into its Rombat battery business in Romania.

Speaking at the company’s financial results for the year ended December 31 on Wednesday, O’Flaherty said Metair required leadership that was focused, intense, engaged in straight talk, while also able to set clear key performance indicators “so that everyone knows what they need to deliver”.

He presented a five-point plan in which he said Metair aimed to stabilise its leadership; address its significant debt levels; unlock value at Mutlu; focus on the European competition commission issue; while the group also had to return to profitability at Hesto, which had experienced severe challenges in servicing its new contract with Ford in South Africa.

O’Flaherty said the company had appointed external debt advisers with the aim of presenting a debt plan to the Metair board by the end of May.

The end of May was also the target date to present proposals around the future of Mutlu, which could include its possible sale.

External advisers had also been appointed around this process.

In the meantime, however, Mutlu, which was operating in a hyperinflation environment, had to win back export sales and run its factory at full capacity, emphasised O’Flaherty.

Hesto had made significant progress as it had managed to return to profitability in the second half of the 2023 year, he added.

Hesto management, however, expected that business prospects would remain “difficult” for the 2024 financial year.

As for the competition commission, O’Flaherty said the enquiry would be “long and arduous”, with no current view on how long the process would take, or what the quantum of any possible fine would be.

While all of these factors were being addressed, Metair was also engaged in finalising a new strategy to take the group into the future.

“This will be a turnaround and forward-looking strategy,” said O’Flaherty.

Metair CFO Anesh Jogia said Metair achieved capital spend of R690-million in the 2023 financial year, with R910-million committed for 2024, of which R409-million would be spent on critical maintenance and efficiency projects, and R281-million on gearing up for new customer vehicle models and derivatives.

Metair on Wednesday reported a 14% increase in revenue for the 12 months under review, to R15.9-billion, with operating profit increasing by 7%, to R487-million.

Group net debt for the year under review reached R2.8-billion, primarily on the back of extensive capital expansion and working capital needs, especially in Türkiye.

“In the short-term, management is focusing on effective cash management and cost control, delaying non-critical capital expenditures and engaging customers for flexible support on new model capital investments,” noted Jogia.