Slow economy grips Hulamin, Group 5

Trading update from Group Five and interim results from aluminium fabricator Hulamin provides more evidence of the troubled state of the economy, says report.

A TRADING update from construction company Group Five and interim results from aluminium fabricator Hulamin yesterday provided more evidence of the troubled state of the economy, write Mark Allix and Fifi Peters.

Hulamin blamed a sharp fall in aluminium prices, load shedding and a maintenance shutdown as it reported a 34% drop in profit.

But CEO Richard Jacob said it was not about to close down plants as steel producers are.

It has installed generators to cope with power outages but said the diesel cost would be four times higher than that of electricity.

It reported basic and diluted headline earnings per share of 25c and 24c respectively for the first half ended June 30, compared with 41c and 40c per share a year earlier.

Analysts said Hulamin was also hit hard by cheap Chinese imports.

Group Five’s steep plunge in profits echoed others in the sector. It expected a drop of up to 53%, it said, causing its share price to tank more than 12% yesterday.

Analysts have attributed the profit slide to contract losses and downsizing in some divisions; and the delayed startup of a project in Ghana, its biggest.

Group Five has already shed jobs in its civil engineering business.