Durban - Tiger Wheels (Tiwheel), the automotive aluminium wheel and car tyre group, continued to be dogged by losses at its Babelegi plant and had posted "unacceptably low" attributable earnings of R8,7 million for the six months to December, it said yesterday.
Although earnings rose from R1,04 million in the previous interim stage, the results were not comparable because of the write-off of R17 million from discontinued operations in 1999.
The group also announced the development of an aluminium wheel manufacturing plant in North America. The facility, with an initial capacity of 600 000 wheels a year, would be operational in June 2003.
Tiwheel said a high reject rate was behind the losses at the Babelegi wheel manufacturing plant, particularly in the first four months of the year. The first small profit was achieved in November although the normal shut-down period caused losses in December and January.
Compounding its problems was below budget performance from the South African Tiger Wheel & Tyre group. Its wholesale wheel distribution businesses in Europe, North America and South Africa also performed poorly.
However, the offshore ATS wheel manufacturing group, in which Tiwheel holds 74 percent, increased sales in line with its budget. A machinery replacement programme in Germany was proceeding with minimal disruptions, while a new paint facility in Poland was operational.
During the first half, headline earnings a share fell to 15,3c from 32,6c, despite a 14 percent gain in profit before tax to R19,9 million following a 23 percent rise in revenue to R939,6 million. Turnover was up mainly on increased output of wheel manufacturing plants in Poland and Babelegi.
Tiger Wheels' share price rose 10c to R11,80 yesterday on the JSE Securities Exchange.