Metair’s Hesto Harnesses subsidiary displaying some of its products at a trade show at the Durban ICC. In the six months to June 30, 2025, Metair said the improvement in Hesto's performance was now well-entrenched, the initiatives to stabilise AutoZone were bearing fruit and a restructured debt package provided a sustainable platform from which to further reduce debt.
Image: : Nqobile Mbonambi/Independent Newspapers
Metair Investments, a leading motor component manufacturer in South Africa, restructured, right-sized and closed certain operations in the six months to June 30, which enabled it to navigate market shifts and volume variability.
Headline earnings a share from continuing operations for the interim period are expected to decrease between 6% and 10% to between 69 cents and 72 cents a share. Revenue is expected to increase between 52% and 54%, driven by the inclusion of Hesto as a subsidiary from April 1, 2025, and the recently acquired AutoZone, for the full period.
"The improvement in Hesto's performance is now well-entrenched, the initiatives to stabilise AutoZone are bearing fruit, and a restructured debt package provides a sustainable platform from which to further reduce debt.
“Building on the progress we achieved in 2024, manufacturing and production have been further optimised and our stringent focus on efficient project management and operational improvements has resulted in a more flexible operating model, ensuring that the business can deliver optimally to its customers. " said CEO Paul O’Flaherty.
The share price was unchanged at R5.99 on Thursday morning.
“Market conditions remained challenging during the first half of 2025, both for local OEMs and local aftermarket trading. While a reduction in interest rates and easing inflationary pressures provided some macroeconomic relief, persistent uncertainty in both local and global markets continued to weigh on business confidence. As a result, consumer demand remained subdued,” they said.
Despite these headwinds, volumes at key South African OEM customers improved and were in line with forecasts. The improvement initiatives at Hesto Harnesses, the group's major wiring harness supplier, resulted in higher revenue and improved operating profit.
Earnings before interest and taxation (EBIT) were expected to range between R440m and R460m, representing an increase of between 24% and 30%.
The sale of the Mutlu battery manufacturing company in Türkiye was finalised in December 2024, which had derisked the balance sheet.
Operations were restructured into two core segments: the OEM Direct Component Manufacturing segment and the Aftermarket Parts and Retail (AFM) segment, which is focused on serving the independent aftermarket and retail distribution channels.
In the OEM Direct Component Manufacturing segment, the group’s directors did not expect the US tariff turmoil to have a direct impact on Metair's OEM customers, as these customers did not supply into the US market. However, there would be an indirect impact on South Africa's economy.
OEM segment revenue for the first half was expected to increase by between 65% and 70% from R3.29bn at the same time last year. If Hesto was included for the full six months in both comparative periods, OEM revenue would have increased by between 7% and 9%.
Revenue from the AFM Segment was expected to increase by between 32% and 35% from R2.39bn in the first half of last year, driven largely by the inclusion of AutoZone.
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