goods” although purchases of newer vehicles was going down.

“A number of vehicles in SA are getting older; people are not buying newer vehicles and this is an opportunity for the after sales industry,” explained O’Flaherty.

Nonetheless, operating conditions during the year to end December “remained challenging largely due to lower production at local OEMs caused by weaker demand from traditional export” markets.

A shift in market share dynamics due to the infux of imported vehicles, especially from China and India, also worsened the situation.

Moreover, there were reduced production volumes at one of Metair’s major customers, Toyota South Africa Motors (TSAM), due to engine certication issues in its export markets.

However, these issues were successfully resolved by TSAM in December, said the company.

Consequently, revenues in Metair from continuing operations for the year under review declined by 2% to R11.8 billion despite the impact of lower OEM production volumes by TSAM.

The challenges faced by TSM exposed Metair to an annual volume decline of 28%. However, this volume reduction was offset by improved operational efficiencies, cost controls and price growth across the group.

Price growth for Metair during the year was mainly a consequence of higher material cost content and complexity, and increased export battery sales.

Metair’s automotive components business excluding Hesto contributed R7.2bn to group revenue.

Headline earnings per share on a continuing basis dipped by 9 cents or 9% to 89 cents per share for the period. The delclime in full year earnings for Metair has been attributed to lower proftability in the overall automotive business.

Metair’s net debt, including Hesto and associated guarantees, reduced to about R4 billion as at the close of 2024, the majority of which was classifed as short term.

This month, the board of Metair and its lenders approved a capital restructuring plan aimed at providing the company with “a more sustainable debt structure and appropriately aligned repayment terms to reposition” it for growth and long-term sustainability.

BUSINESS REPORT

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