Africa-Press – South-Africa. Industrial group Hudaco said on Friday while load shedding weighed on its operations in its half-year to end-March, strong demand for items such as alternative energy and gas helped lift profits marginally.
Revenue increased by 12% to R4.25 billion, the company reported on Friday. But its profit only rose 0.3% to R293 million. The group described its performance as “still respectable”, considering that severe load shedding disrupted trading conditions.
It upped its interim dividend by 8% to R3.25 per share – about a R100 million payout – while it also spent R112 million buying back about 2% of its own shares.
Hudaco, valued at about R4.8 billion on the JSE, specialises in the import and distribution of a broad range of branded automotive, industrial and electronic consumable products, while also having manufacturing interests.
Consumer-related products account for 53% of group sales and 59% of operating profit.
It saw growth and market share gains in the alternative energy, security, communications and gas and outdoor sectors, the group said, but with the disposable income of consumers coming under increased pressure from inflation and higher interest rates, there were reduced volumes in automotive products and power tools. Segment sales increased 13% to R2.2 billion, while operating profit decreased 3% to R294 million.
Its engineering division benefitted from strong demand from both manufacturing and mining clients, with sales growing by 11.8% to R2 billion, and operating profit increased by 4.3% to R204 million.
Hudaco said it was optimistic the momentum within its businesses will continue in the second half. “However, we remain extremely disappointed by the government’s failure to tackle infrastructure deterioration, create jobs, and address rampant corruption.
“Added to this is the growing concern related to the government’s foreign policy, which has contributed to significant depreciation of the rand and compromised key international relationships,” it added. Hudaco said the threat to SA’s trade privileges with the US put at risk 180 jobs at its Cape Town-based business Gear Pump Manufacturing (GPM).
A bipartisan group of top US legislators recently demanded that this year’s African Growth and Opportunity Act (AGOA) summit be moved away from South Africa and warned that the country was in danger of losing its AGOA status. This follows Pretoria’s perceived support for Moscow.
GPM specialises in the manufacture and assembly of mounted cast iron pumps and associated components, with the group saying it “has made great strides in growing its sales of locally manufactured gear pumps into the American market”, but with this growth lately only being constrained by load shedding.
Shares in Hudaco were down about 2.5% in morning trade on Friday, but are still up almost 5% in the year to date. Click here for details of its shares as well as other info.
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