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INSIMBI INDUSTRIAL HOLDINGS LIMITED - Condensed Results for the Year Ended 28 February 2022, Distribution of Integrated Annual Report and Notice of AGM

Release Date: 31/05/2022 10:09
Code(s): ISB     PDF:  
Wrap Text
Condensed Results for the Year Ended 28 February 2022, Distribution of Integrated Annual Report and Notice of AGM

INSIMIBI INDUSTRIAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2002/029821/06)
Share code: ISB & ISIN: ZAE000116828
(“Insimbi” or “the Group”)

SHORTFORM ANNOUNCEMENT: CONDENSED CONSOLIDATED RESULTS FOR
THE YEAR ENDED 28 FEBRUARY 2022, DISTRIBUTION OF INTEGRATED
ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING

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         28 February
                                                        2022                2021         % Change

Revenue (R’000)                                    6 058 535           4 909 528              23%

Net profit (R’000)                                   104 246              43 880             138%

Operating profit (R’000)                             206 504             113 518              82%

Cash generated from operations (R’000)               235 787              35 964             556%

Earnings per share (cents)                             25,91               10,61             144%

Headline earnings per share (cents)                    24,58               10,36             137%


TRADING AND FINANCIAL PERFORMANCE

The 2022 financial year has been an interesting year with many new challenges, while the
pandemic continues to affect many economies across the globe in some way. The group has
adapted to the “new normal” and has become more efficient and resilient in its operations.

Group revenue increased by 23% from R4,9 billion to R6,1 billion. This increase is attributable
to rising commodity prices and an overall improvement in economic conditions globally, as
well as in South Africa. Gross profit has increased by 27% from R454 million to R576 million
as a result of improved margins supported by the upward trend in commodity prices.

The group posted an operating profit of R207 million, compared to R114 million in the previous
year. Operating expenses increased by 11% from R348 million to R386 million. The largest
contributors in this area (when compared to the prior year) are fuel and toll expenses (up by
10%), insurance (up by 25%), repairs and maintenance (up by 20%) and employee costs (up
by 14%). The increase in employee costs is largely due to the salary sacrifices that were made
by all our employees in the prior year, as a result of the pandemic.

DIVIDEND

Given the uncertainty that prevails in the current local and global markets, the board has
elected not to declare a final dividend (2021: nil).

OUTLOOK AND PROSPECTS

Prices for most of our commodities were high during the year. This benefits Insimbi’s export
and local revenue due to the US$ base pricing of these commodities. We welcome the global
move to cleaner production and cleaner metals, as evidenced by China’s focus on closing
‘dirty’ steel plants, among other country-level initiatives. Cleaner metals lie at the heart of our
business, and we are finding the appropriate balance for maintaining sales in the face of rising
raw material costs.

The long-awaited export duties on recycled ferrous and non-ferrous metal became effective
from 1 August 2021, but exporting recycled metals remains a challenge in the current
environment. As noted at the interim stage, civil unrest in KwaZulu-Natal and Gauteng in
July 2021 closed the vital N3 transport corridor for several days. This was closely followed by
the Transnet cyber-attack in August, which forced the state transport utility to declare force
majeure at Durban port, with significant reputational damage. The reluctance of shipping lines
to dock in Durban in the aftermath produced a months-long logistical bottleneck for both
incoming and outgoing containerised goods via that port. We are managing our exports
accordingly and communicating constantly with affected clients. These logistics issues were
compounded by the 16-day NUMSA strike in October, which again required innovative
solutions to meet our contractual obligations.

Going forward, our focus remains on recycling and beneficiating ferrous and non-ferrous
metals for supply to local and export clients. Insimbi generates strong positive cash flows and
we are steadily de-gearing our balance sheet to facilitate potential strategic acquisitions.

While the integration and rationalisation of acquisitions over the past five years is almost
complete, in the short to medium term, our focus is on growing organically by capitalising on
existing available capacity without increasing fixed costs.

In conclusion, the group met the challenges of the 2022 financial year head on, reinforcing its
resilience under volatile conditions and the commitment of our teams. We are confident about
the year ahead for our group. A return to meaningful economic growth in South Africa and any
progress on infrastructural development will generate additional tailwinds.

Any forward-looking statements contained in this announcement have not been reviewed nor
reported on by the company’s auditors.

DISTRIBUTION OF INTEGRATED ANNUAL REPORT AND NOTICE OF ANNUAL
GENERAL MEETING

Shareholders of the Insimbi (“Shareholders”) are hereby advised that Insimbi’s integrated
annual report (“Integrated Report”), incorporating the full audited consolidated annual
financial statements of the company for the year ended 28 February 2022 (“Annual Financial
Statements”) and the notice of the annual general meeting of the company (“Notice of AGM”)
was dispatched to Shareholders today, 31 May 2022.

The Integrated Report and the Annual Financial Statements will also be available on the
group’s website, at www.insimbi-group.co.za as from today, 31 May 2022.

Notice is hereby given that the annual general meeting (“AGM”) will be held electronically at
10:00 on Wednesday, 6 July, to transact the business as set out in the abovementioned notice
of AGM.

Kindly note the following salient details:

    Issuer name                                            Insimbi Industrial Holdings Limited
    Type of instrument                                                         Ordinary shares
    ISIN number                                                                   ZAE000116828
    JSE code                                                                               ISB
    Meeting type                                                        Annual General Meeting
    Meeting venue                                                     Electronic communication

    Record date – to determine which                                       Friday, 20 May 2022
    Shareholders are entitled to receive the notice
    of meeting
    Publication/posting date                                              Tuesday, 31 May 2022
    Last day to trade – Last day to trade to                             Tuesday, 28 June 2022
    determine eligible Shareholders that may
    attend, speak and vote at the meeting
    Record date – to determine eligible                                    Friday, 1 July 2022
    Shareholders that may attend, speak and vote
    at the meeting

    Meeting deadline date (For administrative                              Monday, 4 July 2022
    purposes, forms of proxy for the meeting to be
    lodged)
    Meeting date                                               10:00 on Wednesday, 6 July 2022
    Publication of results                                              Wednesday, 6 July 2022
    Website link                                                       www.insimbi-group.co.za

SHORT FORM ANNOUNCEMENT

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 is available on the JSE’s website at
https://senspdf.jse.co.za/documents/2022/jse/isse/ISBE/FY2022.pdf and on the group’s
website at https://insimbi-group.co.za/investor/investor-hub/. The full announcement is
available for inspection at the group’s registered office (359 Crocker Road, Wadeville,
Germiston) and at the sponsor’s office (1st floor, Ou Kollege, 35 Kerk Street, Stellenbosch) at
no charge from 8:00 to 16:00, Monday to Friday, from 31 May 2022. Copies of the full announcement may also be requested from the Company Secretary: MMadhlophe@insimbi-
group.co.za.

Any investment decisions by investors and/or Shareholders in relation to the Insimbi’s shares
should be based on consideration of the Full Announcement, as a whole.

The Annual Financial Statements have been audited by Moore Cape Town Inc. who
expressed an unmodified audit opinion thereon. The full auditor’s report also includes details
of key audit matters. Key audit matters are those that, in their professional judgement, were
most significant in their audit of the consolidated annual financial statements. The auditor’s
report, along with the Annual Financial Statements, are available on the group’s website at
www.insimbi-group.co.za.

This short form announcement has not been audited or reviewed by the company’s auditors.

Johannesburg
31 May 2022

Sponsor
PSG Capital

Date: 31-05-2022 10:09:00
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