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HUDACO INDUSTRIES LIMITED
("Hudaco" or the "Company" or the "Group")
Incorporated in the Republic of South Africa
Registration number 1985/004617/06
Share code: HDC & ISIN: ZAE000003273
TRADING UPDATE AND TRADING STATEMENT
Discontinuance of businesses
Shareholders are advised that Hudaco has discontinued two businesses within its portfolio, and
that these businesses will be classified as discontinued operations in the interim results for the
six months ended 31 May 2026, to be released on SENS on or about 3 July 2026. In both instances,
the Company has previously communicated to the market that the businesses were
underperforming and that their future was under consideration.
Alternative energy business
The more significant of the two is the alternative energy business, distributing solar and back-up
power products, which thrived during the era of frequent load-shedding. It was initially known as
Hudaco Energy and later incorporated into Deltec Energy Solutions. Although demand fell away
once load-shedding ceased, management believed that the business could still succeed in the
alternative energy sector, by providing environmentally friendly solutions and solutions aimed at
reducing energy costs for commercial, industrial and residential applications in the face of ever-
increasing electricity tariffs.
However, that market has become commoditised, with low margins and rapidly falling product
costs putting pressure on selling prices. This "stack it high and sell it cheap" approach is not
aligned with the Hudaco strategy of high-margin value-added distribution and, accordingly, is
being discontinued.
Impairment of inventory that was paid for two to three years ago, amounting to R125m, has been
recognised and limited retrenchment costs have been incurred. Reasonable effort will be made
to extract some value from the inventory, which will be difficult in the prevailing market, and no
further procurement is envisaged.
Hudaco will continue supplying automotive batteries through Deltec and UPS products through
Specialised Battery Systems.
Battery bay management and battery service business within Eternity Technologies
Eternity Technologies supplies traction batteries and services, primarily for forklifts. The
contract-based, highly labour-intensive battery bay management and battery service business
within Eternity Technologies was running at a low margin due to above-inflation increases in
labour costs over an extended period. In the past, product sales to customers of this business
more than compensated for the poor margin. As communicated in the integrated report released
in February 2026, the entry into the market of former staff members with a key supplier
supporting them by splitting the agency, has put product margins under further pressure and this
labour-intensive business is no longer viable.
Eternity Technologies will continue distributing forklift batteries and accessories but has
terminated all management and service contracts with customers. It is in the process of
retrenching approximately 90% of the 245 Eternity Technologies employees. The abandonment
of this business involves retrenchment costs, impairment of plant and inventory write-offs
totalling R21m.
Trading statement
In terms of the Listings Requirements of the JSE Limited, a listed company is required to publish
a trading statement as soon as it becomes reasonably certain that the financial results for the
next reporting period will differ by 20% or more from those of the previous corresponding period.
As a result of:
' the impact of the discontinuance of the operations described above on basic and
headline earnings; and
' the fact that a gain of R35m in the previous year on the fair value adjustment of a liability
to a vendor of a business acquired was not repeated in the current year;
the effects of which are amplified when assessed in a half year period, the board is
reasonably certain that earnings per share ("EPS") and headline earnings per share ("HEPS")
for the six months ended 31 May 2026 will be at least 20% lower than for the six months ended
31 May 2025 ("prior period"). This does not apply to comparable earnings per share ("CEPS"),
which is expected to be higher than in 2025. CEPS excludes discontinued operations and fair
value adjustments on vendor liabilities.
Shareholders are accordingly advised that:
' HEPS and EPS are both expected to be between 624 cents and 635 cents. This is between
34% and 32% lower than the 938 cents and 941 cents, respectively, reported for the prior
period; and
' CEPS is expected to be between 973 cents and 983 cents. This is between 12% and 13%
higher than comparable earnings per share of 870 cents reported for the prior period.
The above information has not been reviewed or reported on by the Company's independent
external auditors.
The Group's results for the six months ended 31 May 2026 are scheduled to be released on SENS
on or about Friday 3 July 2026.
30 June 2026
Edenvale
Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 30-06-2026 05:20:00
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