Trading statement for the year ended 31 December 2019 HULAMIN LIMITED (Incorporated in the Republic of South Africa) Registration number 1940/013924/06 JSE Code: HLM ISIN: ZAE000096210 (“Hulamin”, “the Group” or “the Company”) TRADING STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2019 In terms of paragraph 3.4(b) of the JSE Listings Requirements, the board of directors of Hulamin advises that there is a reasonable degree of certainty that the financial results for the year ended 31 December 2019 (“Current Period”), when compared with the published financial results for the year ended 31 December 2018 (“Comparative Period”), will differ as follows: 31 Dec 2019 31 Dec 2018 Expected Change Actual At least 30% (being at (315) cents per share, or (242) cents per Loss per share least 73 cents per share) lower share lower At least 119% (being at Headline (loss) / (17) cents per share, or 91 cents per least 108 cents per share) earnings per share lower share lower At least 56% (being at Normalised headline 34 cents per share, or 77 cents per least 43 cents per share) earnings per share¹ lower share lower Earnings performance a) Factors impacting the decline in normalised headline earnings per share1 for the Current Period are: i) Hulamin Rolled Products operating performance: Hulamin experienced unusually challenging conditions in 2019, with weak market conditions both locally and internationally. This resulted in Hulamin Rolled Products sales volumes declining 10% to 204kt. Due to the high fixed manufacturing cost base of the business, the impact on operating profit of this sharp reduction in volume has been severe. As a result of the above, Hulamin implemented a cost reduction programme to reduce operating costs by R250 million per annum. This plan is well underway, with approximately 250 employees having left the Group and contractor reductions, as well as other non-manpower savings, having been recorded. ii) Hulamin Extrusions operating performance: A major 11-week disruption to the largest press in Hulamin Extrusions in the first quarter had a considerable impact on sales volumes, working capital, customer service and profits. The press has since been restored to full operating capacity. A restructuring of Hulamin Extrusions during 2019 resulted in the closure of its Olifantsfontein plant and the consolidation of production at its Pietermaritzburg operation. b) Factors impacting the decline in headline earnings per share for the Current Period (in addition to those noted above) include: • a negative metal price lag of R68 million, resulting from the decline in the aluminium price during 2019; • Restructuring costs of R114 million, resulting from the restructuring programmes referred to above; • A timing mismatch related to aluminium futures not qualifying for hedge accounting in 2018; and • A charge arising from the restructuring of Isizinda Aluminium (“Isizinda”), which arrangement includes the acquisition by Hulamin of the rolling slab casting business owned by Isizinda. c) Factors impacting the decline in earnings per share for the Current Period (in addition to those noted above) largely relate to an impairment charge in Rolled Products of in excess of R1.1 billion and an impairment charge in Extrusions of in excess of R30 million. These impairments relate to both a reduction in the 5-year forecast cash flows of the primary cash-generating units, reflecting the softer outlook in market conditions, as well as an increase in the Company’s weighted average cost of capital which takes account of increased uncertainty in the macro environment. Liquidity and solvency The Group’s net borrowings were R227 million at 31 December 2019. This represents a debt to equity ratio of around 10%. Hulamin has borrowing facilities of R1.5 billion. Hulamin remains well within its bank covenants. A further trading statement for the year ended 31 December 2019 will be issued once there is greater certainty on the range of the financial results that will be reported. Notice of postponement of release of annual results for the year ended 31 December 2019 Shareholders are advised that the Company is in the process of finalising results for the year ended 31 December 2019, which is taking longer than anticipated. Factors contributing to this delay include finalisation of the following matters: • The accounting for the restructuring of Isizinda that was negotiated and agreed during 2019; • The impairment charge; and • The financial results of one of the Group’s business units, Hulamin Containers (“Hulacon”), still need to be finalised. Hulacon generated revenue of R252 million in 2018, representing approximately 2% of Group revenue. A further announcement regarding the date of release of the Group’s results for the year ended 31 December 2019 will be made once these matters have been resolved. Resolution of these matters may necessitate an adjustment to the interim 2019 unaudited results. The financial information contained in this trading statement is the responsibility of the directors and has not been reviewed or reported on by the Company’s external auditors. ¹ Normalised headline earnings per share is one of the measurement bases which the Hulamin Executive Committee uses in assessing financial performance and is calculated in a consistent manner as per the latest annual financial statements, by dividing normalised headline earnings by the weighted average number of ordinary shares in issue during the year. Normalised headline earnings is defined as headline earnings excluding (i) metal price lag and (ii) material non-trading expense or income items which, due to their irregular occurrence, are adjusted for in order to better present earnings attributable to the ongoing activities of the Group. The presentation of normalised headline earnings is not an IFRS requirement and may not be directly comparable with the same or similar measures disclosed by other companies. Pietermaritzburg 20 March 2020 Sponsor Questco Corporate Advisory Proprietary Limited Date: 20-03-2020 05:17:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.