• Metair Investments increased annual revenue 14% to R15.9 billion as it focused on internal controls and customers to turn nonperforming units around.
• Increasing production volumes of original equipment manufacturers and the recovery of its operations following floods in South Africa helped double revenue at its subsidiary Hesto Harnesses.
• Geopolitical tensions, high inflation in Türkiye and other economic pressures dampened automotive battery sales, however.
• For more financial news, go to the News24 Business front page.

Focusing on what is within its control helped Metair Investments, an automotive components manufacturer, turn an annual R4 million loss into a R129 million profit for the year ended December.

Shares in the JSE-listed manufacturer of suspension springs, brake pads, shock absorbers, radiators and air conditioners rose as much as 6.5% to R13.47 in early trade on Wednesday, valuing the group at R2.7 billion. Metair stock has dropped more than 40% over the past year.

The group said its Hesto Harnesses business doubled revenue and returned to profitability by increasing production volumes of original equipment manufacturers of passenger vehicles and light commercial vehicles in South Africa by a fifth. Hesto produces wiring harnesses and instrument clusters for cars at its factory north of Durban.

Metair said it collaborated with Hesto's major customer and technology partner to turn the business around and stem the first half's losses. These efforts increased Hesto's revenues by 222% to R5.7 billion, turning the first half's R711 million loss to R104 million operating profit.

Metair also exports lithium batteries from operations in South Africa, Türkiye and Romania, and sells energy storage solutions to industries in the telecommunications, utilities, mines and retail sectors. Metair also recovered its components operations after last year’s floods in KwaZulu-Natal.

These make Metair an important player in South Africa's automotive manufacturing and assembly sector, which employs about 500 000 people.

The company said geopolitical tensions, high inflationary in Türkiye and other economic pressures dampened automotive battery sales, with total volumes declining 17% to 7.3 million units.

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Group revenue rose 14% to R15.9 billion, boosted by a 48% increase in sales from its core businesses, which contributed R7.8 billion to group revenue and R567 million to operating profit.

Headline earnings per share, meanwhile, improved to 135 cents from a loss of 17 cents in 2022.

"By focusing on what was within our control and what would make the most impact for our business, our leadership teams successfully navigated numerous challenges to deliver an improved performance," said Metair's CEO Paul O’Flaherty.

He added there is further work to be done for the group to realise its full potential and that management remains focused on unlocking avenues to generate further value.

Group net debt, meanwhile, rose to R2.8 billion as Metair executed extensive capital expansion in Türkiye.

Capital expenditure totalled R690 million to support future growth and efficiency improvements. The group announced it will spend R910 million on capital investments this year.

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