Results for the six months ended 30 June 2025

“There have been pleasing improvements in operating performances across most subsidiaries, and the consolidation of Hesto has reduced Metair’s complexity and improved visibility, while AutoZone’s bedding down and turnaround continues. The new debt package has provided a more sustainable capital structure with better-aligned repayment terms”
Paul O’Flaherty, Metair CEO

Salient features:

• Group revenue increased by 53% to R8 657m*
• Stable OEM customer volumes benefit Metair
• Operating profit before capital items increased by 27% to R450m*
• Headline earnings per share of 65 cents (H1 2024: loss of 3 cents)
• No tariff turmoil impact on Metair, as its OEM customers do not supply into the US market

*Includes three months of consolidated results for Hesto and six months for AutoZone. Comparative information has been represented to reflect the classification of Mutlu as a discontinued operation and the separate presentation of capital items.

Metair, a leading supplier of automotive components across Africa, has increased its operating profit (before capital items) for the six months ended 30 June 2025 by 27% to R450 million (H1 2024: R354 million).  

Earnings Before Interest, Taxation, Depreciation and Amortization (EBITDA) (before capital items and excluding income from associates) increased by 40% to R716 million compared to R513 million in the previous six-month period.

Group revenue rose 53% to R8 657 million, from R5 672 million.

The operational and financial improvements resulted from pleasing volume recoveries at Metair’s Original Equipment Manufacturer (OEM) customers, together with efficiency initiatives, supported by improved operating performances across most of the Group’s subsidiaries, and supplemented by cost savings at the corporate level.

Metair benefited from the inclusion of Hesto Harnesses (Hesto) for three months of the six-month period, partially offset by losses from AutoZone, which was expected given that AutoZone is in a recovery phase as it emerges from business rescue.

Metair’s total headline earnings per share (HEPS) (including discontinued operations) rose significantly to 65 cents per share.  This compares to a loss of 3 cents per share in the same period last year, which included the losses from Metair’s recently disposed Türkiye automotive battery manufacturer, Mutlu Akü. 

Group HEPS from continuing operations decreased by 8% to 71 cents per share (H1 2024: 77 cps).  Total basic earnings per share (EPS) (including discontinued operations) reflected a loss per share of 93 cents (H1 2024 loss: 3 cps), whereas EPS from continuing operations reflected a loss per share of 86 cents (H1 2024 profit: 77 cps). Both these numbers were adversely affected in the current period by a once-off net capital loss relating to the accounting for Hesto as a subsidiary. 

Turnaround momentum continues

Paul O’Flaherty, Metair CEO, commented, “Our intense focus on the turnaround process has been on those areas within our control, notably structural simplification, operational execution and ongoing customer support.  This has allowed us to better adapt to market shifts and volume fluctuations, while providing the agility to be more efficient and flexible, ensuring that we can serve customers effectively”.

The focus for the current period has been on manufacturing excellence in supplying OEM customers and bedding down the newly acquired AutoZone business to facilitate the planned growth in the aftermarket segment. Integration processes and the identification of synergistic opportunities at AutoZone are progressing satisfactorily.

O’Flaherty added, “Continuing improvement initiatives have also resulted in higher revenue and improved operating profit at Hesto, the Group’s major wiring harness supplier”.

SA motor sector displaying resilience

South Africa’s total local market vehicle production increased by c. 4% year-on-year, from c. 270 000 vehicles in the prior period, to c. 282 000 vehicles in H1 2025. Naamsa reported in August 2025 that notwithstanding the effects of the United States of America’s (US) 25% automotive tariffs imposed in April 2025, vehicle exports have displayed notable resilience, with year-to-date vehicle exports still 2.5% ahead of the same period in 2024.  This is despite vehicle exports to the US declining by 82% in the first half of the year.

O’Flaherty said, “We do not expect the tariff turmoil to have a direct impact on our OEM customers as these customers do not supply into the US market. However, the tariffs are expected to affect the broader South African economy, the extent of which will only be evident over time”.

Metair net debt restructured

Group net debt (bank borrowings less cash and cash equivalents) increased to R5.1 billion (FY2024: R2.7 billion, excluding Hesto). The increase in net debt is driven primarily by the consolidation of Hesto’s net debt of R1.5 billion at 1 April 2025, as well as a reduction in cash, which reduced to R143 million from R808 million in FY2024.

O’Flaherty continued, “One of the key challenges that Metair faced in recent years was resolving the debt tenor. A debt restructure was successfully implemented over the past six-month period, which has allowed for a repayment profile that matches expected earnings growth and cash flows over the repayment period”.

Metair is pleased to report that all the covenants of the SA Obligor (including minimum EBITDA requirements) were met during the current period. Management continues to monitor debt levels and liquidity closely, and the Group is implementing a range of strategies to support de-gearing and enhance earnings and cash generation.

The Group’s capital expenditure over the period was R154 million (H1 2024: R261 million) of which R88 million was spent on maintenance, R62 million on expansion and R4 million on health and safety.

Looking ahead

Metair expects the progress made in respect of the Group’s turnaround strategy to further enhance margins and improve returns on invested capital. The improvement in Hesto’s performance is now well entrenched, and the initiatives to stabilise AutoZone are bearing fruit.

The restructured debt package has provided a sustainable platform from which to reduce debt further.

O’Flaherty concluded, “We have a renewed focus on growth through expanding Metair’s product offerings and entering new sales channels. The AutoZone acquisition will be a key strategic driver in terms of diversifying dependence on local OEMs and opening new aftermarket sales channels, and we are also assessing opportunities to expand partnerships with existing and new business partners to broaden the customer base and product set. The Sub-Saharan Africa’s mobility sectors offer significant potential, and we are exploring how best to maximise these opportunities”.

FY2026 will be a challenging year as one of Metair’s major customers is introducing a new vehicle and another key customer is optimising its manufacturing operations to market demand conditions and continues to work closely with all affected parties as the changes become clearer over time. Metair will continue with the significant efforts made over the last 18 months to improve project management capabilities by flexing production and costs to remain agile in a challenging market.

Metair continues to track its growth and reset journey, and with increased volumes supplied to key OEM customers largely performing in line with expectations for FY2025, Hesto’s inclusion for nine months and further progress in stabilising AutoZone, the Group remains cautiously optimistic in the outlook for FY2025.

For further information, please contact: 

Troye Brady – troye@aprio.co.za

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