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Trading and operational update and trading statement for the six months ended 30 June 2025
METAIR INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1948/031013/06
ISIN: ZAE000090692
JSE and A2X share code: MTA
("Metair" or the "Company" or the "Group")
TRADING AND OPERATIONAL UPDATE, AND TRADING STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2025
TRADING UPDATE
Introduction
The six months ended 30 June 2025 ("H1 2025" or the "Current Period") were characterised by
continued strong progress in strengthening the resilience of Metair's underlying businesses. Building
on the progress achieved in 2024, manufacturing and production were further optimised and a 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. Measures were
successfully implemented to restructure, right size and close certain operations, which enabled the
Company to dynamically address market shifts and volume variability. The focus for the Current Period
has been on manufacturing excellence in delivering to Original Equipment Manufacturer ("OEM")
customers and bedding down the newly-acquired AutoZone Holdings Proprietary Limited ("AutoZone")
business to enable growth in the aftermarket segment.
Market conditions remained challenging during H1 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. Despite these headwinds, it is
encouraging to report that volumes at key South African OEM customers have improved and remain in
line with forecasts for the Current Period. The continued improvement initiatives at
Hesto Harnesses ("Hesto"), the Group's major wiring harness supplier, resulted in higher revenue and
improved operating profit.
Results from continuing operations (unless otherwise stated)*
Group revenue is expected to increase by between 52% and 54% period-on-period
(H1 2024: R5 672 million), driven by the inclusion of Hesto as a subsidiary with effect from 1 April 2025
and AutoZone for the full Current Period. Earnings before interest and taxation ("EBIT"**), is expected
to range between R440 million (+24%) and R460 million (+30%) (H1 2024: R354 million) at an EBIT
margin of between 5.1% and 5.3% (H1 2024: 6.2%). EBIT was positively impacted by the recovery
initiatives, stronger volumes and the inclusion of Hesto for three months from 1 April 2025. This was
offset by the inclusion of expected losses from AutoZone in the Current Period due to its recovery phase
as it emerges from business rescue.
* As was announced on SENS on 20 December 2024, the Mutlu transaction in Türkiye was successfully
finalised in December 2024. This significantly derisks the balance sheet. A residual amount of
R12 million is reflected as a loss from discontinued operations in the Current Period, being follow-on
costs to conclude the sale. The previously presented results for the six months ended 30 June 2024
("H1 2024" or "Prior Period") have been restated accordingly to allow for comparability.
** EBIT - calculated as operating profit before interest and taxation but excluding the impact of capital
items (impairment of non-financial assets, and profit / loss on disposals and acquisitions).
OPERATIONAL UPDATE
Following a strategic realignment at the end of 2024, including the sale of Mutlu and the acquisition of
AutoZone, the Group has restructured its operations into two core segments:
• the OEM Direct Component Manufacturing segment ("OEM Segment"): supplies components
directly to original equipment manufacturers; and
• the Aftermarket Parts and Retail segment ("AFM Segment"): primarily focuses on serving the
independent aftermarket and retail distribution channels.
Effective from the Current Period, the Group's financial results will be presented under these two
primary segments.
OEM Segment
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. We do not expect the tariff turmoil to have a direct impact
on Metair's OEM customers, as these customers do not supply into the United States market. However,
there is an obvious indirect impact on the South African local economy.
OEM revenue for H1 2025 is expected to increase by between 65% and 70% (H1 2024: R3 287 million),
with EBIT margins expected to improve to between 6.5% and 7.5% (H1 2024: 6%). This growth is
primarily driven by increased volumes supplied to key OEM customers relative to the Prior Period, which
remained largely in line with expectations, and the inclusion of Hesto as a subsidiary from 1 April 2025.
The EBIT margin increase is supported by cost reduction and operational improvement initiatives
implemented during 2024 and continuing into 2025.
If Hesto had been included for the full six months in both comparative periods, OEM revenue would
have increased by between 7% and 9%, and EBIT margins by between 6% and 7% (H1 2024: 5%).
AFM Segment
Revenue from the AFM Segment is expected to increase by between 32% to 35%
(H1 2024: R2 385 million) driven largely by the inclusion of AutoZone.
EBIT margins are expected to decline to between 3.6% and 3.8% (H1 2024: 7.3%) due to the expected
Current Period EBIT loss recorded by AutoZone (which is in a stabilisation phase) and the EBIT margins
at First Battery returning to normalised levels of between 8% and 9% compared to the once-off higher
margin of 14% in H1 2024. If AutoZone is excluded for the Current Period, then EBIT margins for this
segment are expected to be between 6% and 7% (H1 2024: 7.3%), which is in line with forecasts.
At First Battery South Africa, sales volumes declined slightly in H1 2025, with c. 770 000 batteries sold
compared to 786 000 in H1 2024. At Rombat S.A in Romania, volumes sold improved by c. 6% to
1.426 million batteries (H1 2024: 1.345 million), supported by an improvement in both local aftermarket
and OEM sales.
AutoZone Holdings Proprietary Limited
In December 2024, the Group successfully completed the purchase of AutoZone for an aggregate sum
of R278.5 million. As communicated at the time of the acquisition, the financial results for H1 2025 post-
acquisition are anticipated to be soft, as AutoZone is currently in a stabilisation phase consistent with
expectations following the business rescue process, and we anticipate that AutoZone will become a
meaningful contributor to Group earnings by 2026. Encouragingly, the integration process is
progressing well, and AutoZone is already delivering synergies across Metair's automotive aftermarket
and distribution operations. The acquisition strengthens Metair's strategic positioning in the aftermarket
sectors and provides a robust platform for future growth.
Liquidity and debt
On 10 March 2025, as announced on SENS on the same date, the board of directors of Metair ("Board")
and Metair's lenders approved a capital restructuring plan ("Capital Restructure"), designed to provide
Metair with a more sustainable debt structure and appropriately aligned repayment terms. The Capital
Restructure allows for a repayment profile that matches expected earnings growth and cash flows over
a period of five years.
The SA Obligor R3.3 billion refinance, comprising the South African subsidiaries excluding Hesto, was
concluded in April 2025 and the Hesto Obligor c. R1.4 billion refinance was concluded in June 2025. In
addition, the SA Obligor has implemented a cash sweep programme which has yielded positive results
and increased control of Group cash.
While Metair continues to be negatively impacted by high interest paid on its outstanding debt, the
restructured debt package has provided the Group with a more sustainable debt structure and
appropriately aligned repayment terms. We are pleased to report that all the covenants of the SA Obligor
were met during the Current Period. Management continues to closely monitor debt levels and liquidity,
with reducing debt in the medium term remaining a key priority.
European Commission's statement of objections
Shareholders are referred to previous announcements regarding the European Commission's
("Commission") investigations into battery manufacturers in Europe. At this stage, no ruling or final
determination has been made by the Commission and a reliable estimate of any potential fine cannot
be determined.
CONCLUSION
Metair is pleased with the progress in the past six months, where there has been a marked recovery in
volumes and improvement in margins on the back of the restructuring and optimisation efforts of the
Group. 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 the Group with a sustainable
platform from which to further reduce debt.
TRADING STATEMENT
In terms of paragraph 3.4(b) of the JSE Limited Listings Requirements, companies are required to
publish a trading statement as soon as they are satisfied that a reasonable degree of certainty exists
that the financial results for the period to be reported upon next, will differ by at least 20% from the
financial results for the previous corresponding period.
The accounting for Hesto as a subsidiary with effect from 1 April 2025 is expected to result in a
significant once-off net capital loss of approximately R300 million primarily due to the recognition of
losses from Hesto not accounted for previously. This item is eliminated in the calculation of headline
earnings per share ("HEPS") but is included in the calculation of earnings per share ("EPS").
Metair is in the process of finalising its financial results for the six months ended 30 June 2025
("Results") and Metair shareholders are accordingly advised as follows:
Total earnings guidance including discontinued operations
In respect of the Group's total earnings, the Company expects to report:
• HEPS of between 63 cents and 67 cents (H1 2024: headline loss per share of 3 cents); and
• a loss per share of between 90 cents and 95 cents (H1 2024: loss per share of 3 cents) due
primarily to the once-off net capital loss relating to the accounting for Hesto as a subsidiary with
effect from 1 April 2025.
Earnings guidance from continuing operations
In respect of the Group's earnings from continuing operations, the Company expects to report:
• HEPS of between 69 cents and 72 cents, being a decrease of between 6% and 10%
(H1 2024: HEPS of 77 cents*); and
• a loss per share of between 80 cents and 90 cents (H1 2024: EPS of 77 cents*) due primarily
to the once-off net capital loss relating to the accounting for Hesto as a subsidiary with effect
from 1 April 2025.
*Comparative information has been re-presented for Mutlu as a discontinued operation in accordance
with International Financial Reporting Standards (IFRS) 5.
The Results are expected to be published on or about Wednesday, 10 September 2025.
The pro forma financial information contained in this announcement has been prepared in accordance
with IFRS, is provided for illustrative purposes only and, because of its nature, may not fairly represent
the financial performance of the Group.
The information contained in this announcement is the responsibility of the Board and does not
constitute an earnings forecast. Such information has not been audited, reviewed, or reported on by the
Group's external auditors.
7 August 2025
Johannesburg
Sponsor
One Capital
Date: 07-08-2025 08:00:00
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