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Provisional Reviewed Condensed Consolidated results for the financial year ended 28 February 2021
INSIMBI INDUSTRIAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration No: 2002/029821/06)
Share code: ISB ISIN code: ZAE000116828
("Insimbi" or "the group" or "the company")
Provisional Reviewed Condensed Consolidated results for the financial year
ended 28 February 2021
PROFILE
Insimbi provides the local and export steel, aluminium, cement, foundry, plastics, paper and
pulp industries with resource-based commodities like ferrous and non-ferrous metal and alloys,
as well as refractory materials, by integrating the supply, logistics and technical support
functions.
FINANCIAL PERFORMANCE
28 February 29 February %
2021 2020 Change
Revenue (R'000) 4 909 528 4 812 068 2
Net profit (R'000) 43 880 29 366 49
Operating profit (R'000) 113 518 93 733 21
Cash generated from operations (R'000) 35 964 145 944 (75)
Earnings per share (cents) 10.61 8.08 31
Headline earnings per share (cents) 10.36 10.13 2
GROUP TURNOVER
TRADING AND FINANCIAL PERFORMANCE
Since December 2019, the spread of Covid-19 has severely impacted many local economies around
the globe. In many countries, businesses were forced to cease or limit operations for long or
indefinite periods of time. Global stock markets have also experienced great volatility and
governments and central banks have responded with monetary and fiscal interventions to
stabilise economic conditions.
When the president declared the national state of disaster, and the economic lockdown that
followed late March 2020, the group temporarily closed most of its operations in light of
social distancing efforts, quarantines and border closures related to the spread of Covid-19.
Most of the group's operations resumed once the country moved to level 4 of lockdown, with a
limited staff capacity at some of the operations, and increased back to full capacity as the
country moved to more relaxed levels of lockdown.
Group revenue increased by 2% from R4,8 billion to R4,9 billion. This increase is
attributable to accounting for a full year of the Treppo Group. The growth has however been
offset by the significant loss of income as explained above. Gross profit however increased
by 9% from R414 million to R453 million as a result of improved margins.
Operating profit of R114 million was achieved, compared to R94 million in the previous year.
The savings on variable costs in the lockdown period, along with significant cost-saving
measures implemented by all operations, resulted in an increase in operating expenses of
only R6 million, or 2%, this despite the inclusion of Treppo group for a full year.
DIVIDEND
Given the uncertainty that prevails in the current local and global markets as a result of
the Covid-19 pandemic, the board has elected not to declare a final dividend.
OUTLOOK AND PROSPECTS
The ferrous segment supplies raw material inputs to the steel and stainless-steel industries.
Considering the impact of the various levels of lockdown on these industries (conservatively
6 to 8 weeks of plant shutdowns), the growth in revenue and profitability in the current year
is exceptionally pleasing and it is attributable to the inclusion for a full trading year,
of the Treppo Group which was acquired in November 2019. This acquisition has placed us
amongst the leaders in our market for recycled ferrous metal and has contributed significantly
to the groups' increasing local, regional and global footprint and diversification. The
ferrous segment was also stimulated by improved ferrous metal prices in the second half of
the financial year during which iron ore prices increased by 40%. This segment is geared
towards export, but as a result of legislative amendments post lockdown, we have been unable
to export any ferrous metal and are only able to supply into the local market, which is at
a significant discount to export parity. We remain hopeful that with the planned introduction
of export tariffs mooted for later this financial year, that we will again be able to export
some of our material.
Despite the advent of Covid-19 and the resultant effective 6 to 8-week shutdown during
lockdown, the non-ferrous segment performed well in its target markets including the export,
secondary aluminium, automotive, and foundry industries. Major contributors, including copper
and aluminium based non-ferrous metals, recovered from 5 to 10-year price lows in the previous
financial year to near record highs during the second half of the financial year and this
also provided some welcome stimulus to this segment. This segment is definitely starting to
benefit from the growing global trend to move to eco-friendly battery operated transportation
and we do not expect this to reverse or slowdown in the short term.
The refractory segment felt the "brunt" of the pandemic the most within our portfolio but
still performed well under the circumstances. The rotary kiln offering of this segment in
particular, had its best year ever. Unfortunately, this was tempered by a significant decline
in supply of refractory linings and technical support to the PGM and steel industries.
The plastic segment was fortunate enough to comply with "essential services" status and it
literally flourished as a result of this. More importantly, it continues to do so. This
business segment has over the past year gone through significant restructuring and
streamlining and is finally turning a sustainable profit albeit small in the year under
review. It is operating with a full order book and a new "lease on life" and we are optimistic
about its future performance.
The provisional condensed consolidated financial statements have been reviewed by Moore Cape
Town Inc., who expressed an unmodified review conclusion, which is available for inspection
at the company's registered office or on our website, www.insimbi-group.co.za.
Any forward-looking statements contained in this announcement have not been reviewed nor
reported on by the company's external auditors.
This short form announcement is the responsibility of the directors and is only a summary of
the information contained in the full announcement and does not contain full or complete
details. The full announcement published on SENS on 31 May 2021 is available on the group's
website at www.insimbi-group.co.za. The full announcement is available for inspection and
copies of the full announcement are available at the group's registered office (359 Crocker
Road, Wadeville, Germiston) and at the Sponsor's office at no charge during office hours
from 31 May 2021. Any investment decisions by investors and/or shareholders in relation to
the company's shares should be based on consideration of the full announcement as a whole.
Copies of the full announcement may also be requested from the Company Secretary
MMadhlophe@insimbi-group.co.za.
The information in this press announcement has been extracted from the reviewed information,
but the announcement itself is not reviewed.
The full announcement is also available
https://senspdf.jse.co.za/documents/2021/jse/isse/ISBE/FY2021.pdf
Directors: F Botha (CA) SA (Chief Executive Officer)
N Winde (CA) SA (Chief Financial Officer)
C Coombs
RI Dickerson* (Chairperson)
IP Mogotlane*
N Mwale*
CS Ntshingila*
(*non-executive)
Company Secretary: M Madhlophe
Registered office: Stand 359 Crocker Road, Wadeville, Germiston, 1422
Website: www.insimbi-group.co.za
Sponsor: PSG Capital
Transfer Secretaries: Computershare Investor Services Proprietary Limited
Auditor: Moore Cape Town Inc.
Johannesburg
31 May 2021
Date: 31-05-2021 02:10:00
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