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Shares in Pietermaritzburg-based aluminium group Hulamin surged about a fifth on Tuesday after it said its interim earnings could more than double.
In a brief trading statement, the company said headline earnings per share are expected to rise by between 94% and 113% to end-June, with the rally on Tuesday erasing the shares' losses for the year to date.
Hulamin, now valued at about R1 billion on the JSE, specialises in rolled aluminium products for precision and high-technology applications. It generated headline earnings of about R136.4 million in the prior comparative period.
The group didn't go into details in its trading update, but it had reported a strong year to end-December, driven by sales of higher-margin products, like beverage cans.
The company said it was pursuing a new scrap strategy, which will see its consumption of scrap for production processes grow - a move that will conserve energy and bring down costs.
Electricity load curtailment presents a growing challenge for the manufacturer. It has invested R20 million in generator capacity, which will protect it up to Stage 6 of load shedding.
READ | Hulamin hungry for scrap as can demand grows
Sasfin Securities global equities strategist David Shapiro said trading volumes in Hulamin shares were very small. A full set of results would be necessary to get a complete assessment of the company's position.
"It's so hard to get a handle on the business," he said. "The last four to five years have been so erratic. They buy aluminium and convert it into product... so the rand can catch them both ways, on import and export."
However, there was a big market for beverage cans, he added. "… the numbers look impressive," he said.
Shares in Hulamin were up just under 20% at R3.15 in late afternoon trade, the exact level where they began 2023, and having now risen about 21% over the past year. Since listing in 2007, the shares have fallen more than 93%.
