Half Year 2026 Hulamin Ltd Earnings Call

August 3, 2026

Speaker #1: Good morning, everyone. I'm Mark Gounder, CEO of Hulamin. Welcome to our 2026 interim results presentation, where Pravashni, our CFO, and I will take you through our operational performance and the financial outcomes for the first half of 2026, and share an update on our execution against our operational recovery plan.

Mark Gounder: Good morning, everyone. I am Mark Gounder, CEO of Hulamin. Welcome to our 2026 interim results presentation, where Pravashni, our CFO, and I will take you through our operational performance and the financial outcomes for H1 2026 and share an update on our execution against our operational recovery plan. We will close with an outlook on our business for H2 2026. We have also included additional information for your reference. At this point, I invite you to type in your questions as we progress through the presentation. H1 2026 marked a significant turning point for Hulamin as the group delivered a strong operational recovery. The operational challenges that adversely impacted performance during H2 2025 have been substantially resolved, restoring stability across the group's core operations.

Mark Gounder: Good morning, everyone. I am Mark Gounder, CEO of Hulamin. Welcome to our 2026 Interim Results Presentation, where Pravashni, our CFO, and I will take you through our operational performance and the financial outcomes for H1 2026 and share an update on our execution against our operational recovery plan. We will close with an outlook on our business for H2 2026. We have also included additional information for your reference. At this point, I invite you to type in your questions as we progress through the presentation. H1 2026 marked a significant turning point for Hulamin as the group delivered a strong operational recovery. The operational challenges that adversely impacted performance during H2 2025 have been substantially resolved, restoring stability across the group's core operations.

Speaker #1: We will then close with an outlook on our business for the second half of 2026. We have also included additional information for your reference.

Speaker #1: At this point, I invite you to type in your questions as we progress through the presentation. The first half of 2026 marked a significant turning point for Hulamin, as the group delivered a strong operational recovery.

Speaker #1: The operational challenges that adversely impacted performance during the second half of 2025 have been substantially resolved, restoring stability across the group's core operations. Core stream production output has recovered to achieve an annualized rate of 527 tons per day in the month of June, which is substantial progress towards our ambitious run rate of 550 tons per day.

Mark Gounder: Core stream production output has recovered to achieve an annualized rate of 527 tons per day in the month of June, which is substantial progress towards our ambitious run rate of 550 tons per day. The Hulamin group returned to normalized profitability basis in H1 2026. While H1 normalized earnings remained below the comparative period, the substantial improvement in operational performance from H2 2025 provides a solid foundation for improved financial performance in the periods ahead. The disposal of the non-core Extrusions and continuous businesses is complete. Proceeds from this disposal will flow into the remainder of 2026, will be applied to reduce debt, and further strengthen our balance sheet. Throughout the operational recovery journey, safety remained a key priority, with focus on leading indicators has continued to yield positive results, driven by a shift from a reactive to a proactive safety culture.

Speaker #1: The Hulamin Group returned to a normalized profitability basis in the first half of 2026. While first-half normalized earnings remained below the comparative period, the substantial improvement in operational performance from the second half of 2025 provides a solid foundation for improved financial performance in the periods ahead.

Speaker #1: The disposal of the non-core extrusions and containers businesses is complete. Proceeds from these disposals, which will flow in over the remainder of 2026, will be applied to reduce debt and further strengthen our balance sheet.

Speaker #1: Throughout the operational recovery journey, safety remained a key priority, with focus on leading indicators continuing to yield positive results, driven by a shift from a reactive to a proactive safety culture.

Speaker #1: The continued focus on leading indicators has yielded positive results, as our safety incidence trends improve against benchmark. This reinforces our commitment to people, discipline, and high-risk management.

Mark Gounder: The continued focus on leading indicators has yielded positive results as our safety incident trends improve against benchmark. This reinforces our commitment to people, discipline, and high-risk management. Hulamin remains substantially market unconstrained despite geopolitical landscape changes and challenges. Our order book remains strong on all key streams and wide can body production qualification has been completed with can customers. Following the resolution of majority of the operational challenges experienced in H2 2025, our core operations have stabilized and are ramping up towards the upgraded plant design run rates. Volumes of 85,000 tons were 4% below the strong H1 2025 comparative, but improved by 7% compared with H2 2025, reflecting a meaningful recovery across the group core product streams. This improvement was driven by an operational restructuring program, including targeted management changes to strengthen accountability for plant reliability, operational performance, and product quality.

Speaker #1: Hulamin remains substantially market unconstrained despite geopolitical landscape changes and challenges. Our order book remains strong on all key streams, and wide can body product production qualifications have been completed with can customers.

Speaker #1: Following the resolution of the majority of the operational challenges experienced in the second half of 2025, our core operations have stabilized and are ramping up towards the upgraded plant design run rate.

Speaker #1: Volumes of 85,000 tons were 4% below the strong first half of 2025 comparative, but improved by 7% compared with the second half of 2025, reflecting a meaningful recovery across the group core product streams.

Speaker #1: This improvement was driven by an operational restructuring program, including targeted management changes to strengthen accountability for plant liability, operational performance, and product quality. While the appointment of specialist technical resources addresses critical skills gaps and supports the sustainable improvement of operational capabilities, our capital expenditure peak is now complete, following the commercialization of wide can body investment.

Mark Gounder: This improvement was driven by an operational restructuring program, including targeted management changes to strengthen accountability for plant reliability, operational performance, and product quality. While the appointment of specialist technical resources to address critical skills gaps and support the sustainable improvement of operational capabilities. Our capital expenditure peak is now complete following the commercialization of wide can body investment. The focus is on sustaining plant liability and uptime, which is enabled by normal CapEx levels between ZAR 250 and 300 million going forward. We have substantially resolved all quality challenges that impacted our can end stream, with performance recovering from below 80 tons per day last year to approximately 120 tons per day. We will cover operational performance in the next slide to clearly show the recovery journey thus far.

Mark Gounder: While the appointment of specialist technical resources to address critical skills gaps and support the sustainable improvement of operational capabilities. Our capital expenditure peak is now complete following the commercialization of wide can body investment. The focus is on sustaining plant liability and uptime, which is enabled by normal CapEx levels between ZAR 250 and 300 million going forward. We have substantially resolved all quality challenges that impacted our can end stream, with performance recovering from below 80 tons per day last year to approximately 120 tons per day. We will cover operational performance in the next slide to clearly show the recovery journey thus far. Hulamin has restored operational performance following the commissioning and subsequent quality challenges associated with the can end stream in H2 2025.

Speaker #1: The focus is on sustaining plant reliability and uptime, which is enabled by normal capex levels between $250 million and $300 million going forward. We have substantially resolved all quality challenges that impacted our can-end stream.

Speaker #1: With performance recovering from below 80 tons per day last year to approximately 120 tons per day, we will cover operational performance in the next slide to clearly show the recovery journey thus far.

Speaker #1: Hulamin has restored operational performance following the commissioning and subsequent quality challenges associated with the canned stream in the second half of 2025. This represents a significant milestone in the execution of our strategy, enabling the business to begin realizing the benefits of the expansion and growth capital invested over the past two years.

Mark Gounder: Hulamin has restored operational performance following the commissioning and subsequent quality challenges associated with the can end stream in H2 2025. This represents a significant milestone in the execution of our strategy, enabling the business to begin realizing the benefits of the expansion and growth capital invested over the past two years. To orientate all of you to the slide highlighting plant performance ramping up to target on a tonnes per day basis. On the far left, we cover the half-year overview. In the center of the slide is the monthly tonnes per day run rate achieved. On the far right is our 200,000 tonnes annualized ambition broken into tonnes per day. Our high-margin products is can body, which is in blue, can end in green, and heat treat plate in blue. Besides the total volume, the ideal mix is crucial for Hulamin to deliver improved value to our stakeholders.

Mark Gounder: This represents a significant milestone in the execution of our strategy, enabling the business to begin realizing the benefits of the expansion and growth capital invested over the past two years. To orientate all of you to the slide highlighting plant performance ramping up to target on a tonnes per day basis. On the far left, we cover the half-year overview. In the center of the slide is the monthly tonnes per day run rate achieved. On the far right is our 200,000 tonnes annualized ambition broken into tonnes per day. Our high-margin products is can body, which is in blue, can end in green, and heat treat plate in blue. Besides the total volume, the ideal mix is crucial for Hulamin to deliver improved value to our stakeholders.

Speaker #1: To orientate all of you to the slide highlighting plant performance ramping up to target on a tons-per-day basis. On the far left, we cover the half-year overview.

Speaker #1: In the center of the slide is the monthly tons-per-day run rate achieved. On the far right is our 200,000 tons annualized ambition, broken into tons per day.

Speaker #1: Our high-margin products are canned body, which is in blue, canned end in green, and heat-treat plate in blue. Besides the total volume, the ideal mix is crucial for Hulamin to deliver improved value to our stakeholders.

Speaker #1: H1 2026 was 12 tons per day lower than H1 2025, but 56 tons per day higher than H2 2025, with core product streams responding positively.

Mark Gounder: H1 2026 was 12 tonnes per day lower than H1 2025, but 56 tonnes per day higher than H2 2025, with core product streams responding positively. Can body and heat treat plate both exceeded H1 2025 production levels, moving closer to the run rates required to achieve the group's targeted annualized production capacity. Can end production remained below benchmark, constrained by internal quality challenges. However, having substantially resolved these issues, the stream improved steadily through the half to achieve production of 120 tonnes per day in June. Further improvement is expected during H2 of this year. Excess capacity in casting and hot rolling was redirected towards non-core hot band production, where market demand remained available. This enabled the group to improve fixed cost absorption and optimize utilization of casting and hot rolling assets.

Speaker #1: Canned body and heat-treat plate both exceeded first-half 2025 production levels, moving closer to the run rates required to achieve the group's targeted annualized production capacity.

Speaker #1: Canned end production remained below benchmark, constrained by internal quality challenges. However, having substantially resolved these issues, the stream improved steadily through the half to achieve production of 120 tons per day in June.

Speaker #1: Further improvement is expected during the second half of this year. Excess capacity in casting and hot rolling was redirected towards non-core hot pan production, where market demand remained available.

Speaker #1: This enabled the group to improve fixed cost absorption and optimize utilization of casting and hot rolling assets. From a market perspective, Hulamin remains substantially market-unconstrained despite geopolitical landscape changes and challenges.

Mark Gounder: On a market perspective, Hulamin remains substantially market unconstrained despite geopolitical landscape changes and challenges. However, these developments have promoted a review and responses to our business model and overall strategy in order to remain well-positioned to capitalize on global demand. Our strategy is to seize emerging opportunities in both local and export markets. On the local front, we are currently 56% of total volumes and are on track with our strategic objective of 60%. Can body demand remains strong, with Hulamin well-positioned to displace wide can body imports as we have fully commercialized our investment. Can end is under import pricing pressure as a result of cheap finished ends being imported from Asia. We are currently working with our customers to support application for local industry safeguards. Lost volumes are being repositioned to North America. Local standards represent an incremental opportunity pending working capital and route to market improvements.

Speaker #1: However, these developments have prompted a review and response to our business model and overall strategy in order to remain well positioned to capitalize on global demand.

Speaker #1: Our strategy is to seize emerging opportunities in both the local and export markets. On the local front, we are currently at 56% of total volumes and are on track with our strategic objective of 60%.

Speaker #1: Canned body demand remains strong, with Hulamin well positioned to displace wide canned body imports, as we have fully commercialized our investment. Canned end is under import pricing pressure as a result of cheap finished ends being imported from Asia.

Speaker #1: We are currently working with our customers to support applications for local industry safeguards. Lost volumes are being repositioned to North America. Local standards represent an incremental opportunity, pending working capital and route-to-market improvements.

Mark Gounder: Lost volumes are being repositioned to North America. Local standards represent an incremental opportunity pending working capital and route to market improvements. In North America, plate demand remains resilient despite Section 232 tariffs, with market prices absorbing tariffs. Growing US Can end demand enables reposition of displaced local volumes. While excess hot mill capacity being optimized through spot hot band sales. The expanded routes to market in Europe for plates is showing positive results, while Hulamin's chrome-free production is key in increasing compliance-driven export markets. Notably on the export market, our focus is on high-margin and niche product streams and segments. I will now hand over to Pravashni to take you through the financial outcomes for H1 2026.

Speaker #1: In North America, plate demand remains resilient despite Section 232 tariffs, with market prices absorbing tariffs. Growing US canned end demand enables repositioning of displaced local volumes.

Mark Gounder: In North America, plate demand remains resilient despite Section 232 tariffs, with market prices absorbing tariffs. Growing US Can end demand enables reposition of displaced local volumes. While excess hot mill capacity being optimized through spot hot band sales. The expanded routes to market in Europe for plates is showing positive results, while Hulamin's chrome-free production is key in increasing compliance-driven export markets. Notably on the export market, our focus is on high-margin and niche product streams and segments. I will now hand over to Pravashni to take you through the financial outcomes for H1 2026.

Speaker #1: While excess hot mill capacity is being optimized through spot hot pan sales, the expanded routes to market in Europe for plates are showing positive results, while Hulamin's chrome-free production is key in increasing compliance-driven export markets.

Speaker #1: Notably, on the export market, our focus is on high-margin and niche product streams and segments. I will now hand over to Pravashni to take you through the financial outcomes for the first half of 2026.

Speaker #2: Thank you, Mark. Mark has highlighted several of the key drivers of our 2026 financial performance. Before discussing the operational and financial performance in more detail, it is helpful to set the context by looking at the market conditions that shaped the result.

Pravashni Nirghin: Thank you, Mark. Mark has highlighted several of the key drivers of our 2026 financial performance. Before discussing the operational and financial performance in more detail, it is helpful to set context by looking at the market conditions that shaped the results. Hulamin's financial performance remains highly sensitive to the movements in the LME aluminum price and the rand-dollar exchange rate. During H1 2026, both variables were unusually volatile, influenced by geopolitical uncertainty and a tightening global aluminum market. The LME aluminum price increased by more than 30% compared to the prior period and moved above $3,000 per tonne. This supported earnings through a favorable metal price lag contribution of more than ZAR 300 million. At the same time, the higher metal price materially increased the funding required for inventory and therefore placed pressure on net working capital.

Speaker #2: Hulamin's financial performance remains highly sensitive to movements in the LME aluminium price and the rand-dollar exchange rate. During the first half of 2026, both variables were unusually volatile.

Speaker #2: Influenced by geopolitical uncertainty and a tightening global aluminium market, the LME aluminium price increased by more than 30% compared to the prior period, and moved above $3,000 per ton.

Speaker #2: This supported earnings through a favorable metal price lag contribution of more than R300 million. At the same time, the higher metal price materially increased the funding required for inventory and, therefore, placed pressure on net working capital.

Speaker #2: The rand strengthened by approximately R1.98 against the US dollar year on year. This reduced rand-denominated margins and adversely affected earnings by more than R150 million.

Pravashni Nirghin: The rand strengthened by approximately ZAR 1.98 against the US dollar year on year. This reduced rand-denominated margins and adversely affected earnings by more than ZAR 115 million. The group currently has no LME hedging in place as the program remains suspended. Foreign exchange exposure is, however, partially managed through rolling margin hedges. As we continue to monitor net debt and liquidity, we will also continue to monitor market conditions and the appropriateness of reintroducing LME hedging. Despite an LME increase of roughly $1,000 per tonne from June 2025 levels to the 2026 peak, the increase in net debt was limited. This reflects the benefit of stronger operating cash generation, tighter working capital management, and disciplined use of available facilities. Turning to the key financial highlights. Group revenue increased by 2% to ZAR 7.2 billion despite lower sales volumes.

Pravashni Nirghin: The rand strengthened by approximately ZAR 1.98 against the US dollar year-on-year. This reduced rand-denominated margins and adversely affected earnings by more than ZAR 115 million. The group currently has no LME hedging in place as the program remains suspended. Foreign exchange exposure is, however, partially managed through rolling margin hedges. As we continue to monitor net debt and liquidity, we will also continue to monitor market conditions and the appropriateness of reintroducing LME hedging. Despite an LME increase of roughly $1,000 per tonne from June 2025 levels to the 2026 peak, the increase in net debt was limited. This reflects the benefit of stronger operating cash generation, tighter working capital management, and disciplined use of available facilities. Turning to the key financial highlights. Group revenue increased by 2% to ZAR 7.2 billion despite lower sales volumes.

Speaker #2: The group currently has no LME hedging in place, as the program remains suspended. Foreign exchange exposure is, however, partially managed through rolling margin hedges.

Speaker #2: As we continue to monitor net debt and liquidity, we will also continue to monitor market conditions and the appropriateness of reintroducing LME hedging. Despite an LME increase of roughly $1,000 per ton from June 2025 levels to the 2026 peak, the increase in net debt was limited.

Speaker #2: This reflects the benefit of stronger operating cash generation, tighter working capital management, and disciplined use of available facilities. Turning to the key financial highlights, group revenue increased by 2% to R7.2 billion, despite lower sales volumes.

Speaker #2: The increase was primarily driven by the higher LME aluminium prices, stronger geographic premiums, particularly during the first quarter of 2026, improved product mix, and the initial commercial returns from the wide canned body project.

Pravashni Nirghin: The increase was primarily driven by the higher LME aluminum prices, stronger geographic premiums, particularly during Q1 2026, an improved product mix, and the initial commercial returns from the Wide Can Body project. Normalized trading profit declined by 53% to ZAR 102 million. This was driven primarily by the stronger rand and the carryover impact of the operational constraints from H2 2025 into Q1 2026, particularly in the canned product stream. EBITDA increased by more than 100% to ZAR 470 million, benefiting significantly from the favorable metal price lag arising from the rising aluminum prices. Despite the pressure of higher metal prices on working capital, the business generated positive cash flow from operating activities before capital expenditure of ZAR 96 million compared to ZAR 16 million in the prior period.

Speaker #2: Normalized trading profit declined by 53% to R102 million. This was driven primarily by the stronger rand and the carryover impact of the operational constraints from the second half of 2025 into the first quarter of 2026, particularly in the canned products stream.

Speaker #2: EBITDA increased by more than 100% to R470 million, benefiting significantly from the favorable metal price lag arising from the rising aluminium prices. Despite the pressure of higher metal prices on working capital, the business generated positive cash flow from operating activities, before capital expenditure, of R96 million compared to R16 million in the prior period.

Pravashni Nirghin: Net debt increased marginally to ZAR 1.7 billion from ZAR 1.59 billion in the prior comparative period. Importantly, the group remained within all funding covenant limits, with debt to equity at 52% against a maximum of 60%, and the current ratio at 2.8 times against the minimum requirements of 1.2 times. This bridge explains the movement in normalized EBITDA from ZAR 282 million in H1 2025 to ZAR 177 million in H1 2026. The largest external headwind was currency. The rand was approximately ZAR 1.98 stronger against the US dollar, reducing earnings by around ZAR 175 million after the benefit from currency hedges. Inflation and commodity-related cost increases added further to the pressure. These included approximately ZAR 55 million of inflationary cost increases and around ZAR 30 million from commodity pricing.

Pravashni Nirghin: Net debt increased marginally to ZAR 1.7 billion from ZAR 1.59 billion in the prior comparative period. Importantly, the group remained within all funding covenant limits, with debt to equity at 52% against a maximum of 60%, and the current ratio at 2.8 against the minimum times requirements of 1.2x. This bridge explains the movement in normalized EBITDA from ZAR 282 million in H1 2025 to ZAR 177 million in H1 2026. The largest external headwind was currency. The rand was approximately ZAR 1.98 stronger against the US dollar, reducing earnings by around ZAR 175 million after the benefit from currency hedges. Inflation and commodity-related cost increases added further to the pressure. These included approximately ZAR 55 million of inflationary cost increases and around ZAR 30 million from commodity pricing.

Speaker #2: Net debt increased marginally to R1.70 billion from R1.59 billion in the prior comparative period. Importantly, the group remained within all funding covenant limits, with debt to equity at 52% against a maximum of 60%.

Speaker #2: And the current ratio is at 2.8 times, against the minimum requirement of 1.2 times. This bridge explains the movement in normalized EBITDA from 282 million rand in the first half of 2025 to 177 million rand in the first half of 2026.

Speaker #2: The largest external headwind was currency. The rand was approximately 1.98 stronger against the US dollar, reducing earnings by around R175 million after the benefit from currency hedges.

Speaker #2: Inflation and commodity-related cost increases added further to the pressure. These included approximately R55 million of inflationary cost increases and around R30 million from commodity pricing.

Speaker #2: Performance was also affected by one-off operational constraints that carried over from late 2025 into the first quarter of 2026. As Mark highlighted, these constraints resulted in approximately 7,000 tons of lost can end production.

Pravashni Nirghin: Performance was also affected by one-off operational constraints that carried over from the late 2025 into Q1 2026. As Mark highlighted, these constraints resulted in approximately 7,000 tons of lost can end production. The impact was partially mitigated by an increase in lower-margin hot band volumes together with stronger demand and an improved sales mix in the can body and heat-treated plate product streams. On the profitable side, as indicated in the previous slide, improved pricing, mix, and geo premiums supported margins, while cost reduction initiatives delivered meaningful savings towards the ZAR 150 million full year target. The operating restructure reduced the ongoing cost base, and further benefits arose from lower overheads and the termination of all lapses of certain share schemes. The bridge therefore shows that underlying demand and cost discipline remained supportive.

Pravashni Nirghin: Performance was also affected by one-off operational constraints that carried over from the late 2025 into Q1 2026. As Mark highlighted, these constraints resulted in approximately 7,000 tons of lost can end production. The impact was partially mitigated by an increase in lower-margin hot band volumes together with stronger demand and an improved sales mix in the can body and heat-treated plate product streams. On the profitable side, as indicated in the previous slide, improved pricing, mix, and geo premiums supported margins, while cost reduction initiatives delivered meaningful savings towards the ZAR 150 million full-year target. The operating restructure reduced the ongoing cost base, and further benefits arose from lower overheads and the termination of all lapses of certain share schemes. The bridge therefore shows that underlying demand and cost discipline remained supportive.

Speaker #2: The impact was partially mitigated by increased lower-margin hardband volumes, together with stronger demand and an improved sales mix in the can body and heat treat plate product streams.

Speaker #2: On the positive side, as indicated in the previous slide, improved pricing mix and geographic premium supported margins, while cost reduction initiatives delivered meaningful savings towards the R150 million full-year target.

Speaker #2: The operating restructure reduced the ongoing cost base, and further benefits arose from lower overhead and the termination or lapse of certain share schemes.

Speaker #2: The bridge, therefore, shows that underlying demand and cost discipline remained supportive. But these benefits were not sufficiently significant to fully offset the impact of the stronger rand and the operational shortfall in the can-end production.

Pravashni Nirghin: These benefits were not sufficient to fully offset the impact of the stronger rand and the operational shortfall in the can end production. Operating cash flow before working capital movement was ZAR 443 million. However, the sharp increase in the aluminum price increased the value of inventory and receivables, resulting in a net working capital outflow of ZAR 294 million. The group also invested ZAR 128 million in CapEx, largely relating to sustaining investment. Interest and statutory payments amounted to ZAR 76 million. These movements resulted in a net cash outflow of ZAR 55 million and an increase in net borrowings from ZAR 1.647 billion at December 2025 to ZAR 1.702 billion at June 2026. The increase in working capital was driven by both price and volume. The price effect arose from higher aluminum embedded in inventory and receivables. The volume effect reflected the inventory required to support the operational recovery and production ramp-up.

Speaker #2: Operating cash flow before working capital movements was 443 million rand. However, the sharp increase in the LME aluminium price increased the value of inventory and receivables, resulting in a net working capital outflow of 294 million rand.

Speaker #2: The group also invested 128 million rand in capital expenditure largely relating to sustaining investment. Interest and statutory payments amounted to 76 million rand. These movements resulted in a net cash outflow of 55 million rand and an increase in net borrowings from 1.647 billion rand at December 2025 to 1.702 billion rand at June 2026.

Speaker #2: The increase in working capital was driven by both price and volume. The price effect arose from higher LME and aluminium embedded in inventory and receivables.

Speaker #2: The volume effect reflected the inventory required to support the operational recovery and production ramp-up. These pressures were mitigated through stronger EBITDA generation, disciplined inventory and debt management, reduced capital expenditure from the prior period, and continued focus on cost reduction.

Pravashni Nirghin: These pressures were mitigated through stronger EBITDA generation, disciplined inventory and debt management, reduced CapEx from the prior period, and continued focus on cost reduction. The group's funding facilities have increased over time to support the business through the periods of elevated metal prices and operational investment. At June 2026, the net debt was ZAR 1.70 billion against total facilities of ZAR 2.250 billion, leaving headroom of more than ZAR 500 million. The headroom was maintained despite the significant increase in the aluminum price and the associated pressure on working capital. The business achieved this through a combination of improving operational stability, disciplined cash management, and the optimization of available hot rolling capacity. The priorities for H2 2026 are focused on reducing net debt and improving liquidity.

Speaker #2: The group's funding facilities have increased over time to support the business through periods of elevated metal prices and operational investment. At June 2026, the net debt was R1.70 billion against total facilities of R2.25 billion.

Speaker #2: Leaving headroom of more than 500 million rand. The headroom was maintained despite the significant increase in the LME price and the associated pressure on working capital.

Speaker #2: The business achieved this through a combination of improving operational stability, disciplined cash management, and the optimization of available hot rolling capacity. The priorities for the second half of 2026 are focused on reducing net debt and improving liquidity.

Speaker #2: These include realizing approximately R100 million from the extrusions disposal and the related working capital recovery, receiving approximately R13 million from the containers property disposal, and targeting around R60 million from inventory optimization and R50 million from debtors optimization.

Pravashni Nirghin: These include realizing approximately ZAR 100 million from the Extrusions disposal and the related working capital recovery, receiving approximately ZAR 30 million from the Containers property disposal, and targeting around ZAR 60 million from inventory optimization and ZAR 50 million from debtors optimization. Management will also continue to review non-critical CapEx and align investment with available liquidity and operational priorities. In parallel, we will continue to monitor both net debt and the group's commodity risk position. The aluminum hedging program remains suspended, but its reintroduction will be reassessed as liquidity improves, net debt reduces, and market conditions become more supportive. Overall, the immediate focus is to convert the operational recovery into cash, preserve adequate facility headroom, and progressively reduce the balance sheet risk. I will now hand over to Mark.

Speaker #2: Management will also continue to review non-critical capital expenditure and align investment with available liquidity and operational priorities. In parallel, we will continue to monitor both net debt and the Group's commodity risk position.

Speaker #2: The LME hedging program remains suspended, but its reintroduction will be reassessed as liquidity improves, net debt reduces, and market conditions become more supportive. Overall, the immediate focus is to convert the operational recovery into cash, preserve adequate facility headroom, and progressively reduce the balance sheet risk.

Speaker #2: I will now hand over to Mark.

Speaker #1: Thank you, Pravashni. Our strategy remains intact, with operational recovery substantially complete and key actions in place to strengthen our core business. These include embedding a delayed operating model with clear accountability and timely execution, bridging critical skills gaps by allocating the correct technical expertise, knowledge transfer, and operational stability with a focus on the following key areas: casting, rolling, oil roll grinding, and total productive maintenance. At the same time, we are investing in executive leadership and capability by appointing a Chief of Operations Officer by September and a Human Capital Executive by October.

Mark Gounder: Thank you, Pravashni. Our strategy remains intact with operational recovery substantially complete and key actions in place to strengthen our core in our business. These include embedding a delayed operating model with clear accountability and timeless execution, bridging critical skills gap by allocating correct technical expertise, knowledge transfer, and operational stability with focus on the following key areas: Casting, rolling oil, roll grinding, and total productive maintenance. While at the same time investing in executive leadership and capability by appointing a Chief Operations Officer by September and a Human Capital Executive by October. With the operational recovery substantially complete and the core streams ramping towards design run rates, Hulamin enters the H2 positioned to convert improved production into stronger financial performance.

Speaker #1: With the operational recovery substantially complete and the core streams ramping towards design run rates, Hulamin enters the second half positioned to convert improved production into stronger financial performance.

Mark Gounder: Wide can body commercialized completed, an improving product mix, commissioning of Richards Bay's scrap utilization capacity in August, use of recycled secondary ingot, continued delivery of cost reduction, and the anticipated flow through of higher global can end pricing are expected to support margins. While proceeds from the non-core disposals and continued working capital discipline are directed at reducing net debt. Thank you for joining us for our interim results presentation. We will now open the floor for any questions. We have also included additional information to be considered when performing analysis of the business as part of the annexures.

Speaker #1: Wide canned body commercialized, completed and improving product mix, commissioning of Richards Bay scrap utilization capacity in August, use of recycled secondary ingots, continued delivery of cost reduction, and the anticipated flow-through of higher global can end pricing are expected to support margins.

Speaker #1: While proceeds from the non-core disposals and continued working capital discipline are directed at reducing net debt. Thank you for joining us for our interim results presentation.

Speaker #1: We will now open the floor for any questions. We've also included additional information to be considered when performing analysis of the business as part of the NHS.

Speaker #3: Good morning, everybody. Thank you for attending this morning. We have four questions so far. We're going to take them one at a time and give an opportunity to the CEO and CFO to respond.

Ayanda Mngadi: Good morning, everybody. Thank you for attending this morning. We have four questions so far. We are going to take them one at a time and give an opportunity to the CEO and CFO to respond. We will start with a question from Sabrina from the Engineering News, and it reads, "Could you please comment on the impact of US tariffs on the company, if any?

Speaker #3: We'll start with a question from Sabrina from Engineering News, and it reads: "Could you please comment on the impact of US tariffs on the company, if any?"

Speaker #1: Thanks, Amanda, for the question, and thanks, Sabrina. I think, in order to answer the question completely, we need to understand the US tariffs properly.

Mark Gounder: Thanks, Ayanda, for the question, and thanks, Sabrina. I think in order to answer the question completely, I think we need to understand the US tariffs properly. The Section 232 tariff right now, the above 50%, is actually applicable to all countries, whereas that was not consistent previously. So what we have seen right now is, firstly, our plate sales, which is majority of the product that we sell into US, has actually been completely resilient in the market, and we have seen actually an uptick. And that is as a result of, firstly, an equal playing field being maintained for all countries, and due to our quality and service, we are able to compete globally in that sense. But more especially what we have seen is because of the US market being a net importer, market prices has adjusted for the 50% tariff and has increased accordingly.

Speaker #1: The section 23 tariff right now the the above 50% is actually applicable to all countries. whereas that was not consistent previously. So what we've seen right now is firstly our plate sales which is majority of the product that we sell into US has actually been completely resilient in the market and we've seen actually an uptake and that's as a result of firstly an equal playing field being maintained for all countries and due to our quality and service we able to compete globally in that in that sense but more especially what we've seen is because of the US market being a net importer market prices has adjusted for the 50% tariff and as as increased accordingly.

Mark Gounder: And that is as a result of, firstly, an equal playing field being maintained for all countries, and due to our quality and service, we are able to compete globally in that sense. But more especially what we have seen is because of the US market being a net importer, market prices has adjusted for the 50% tariff and has increased accordingly. Going into H2, I see the trend continuing as long as the equal playing field is maintained.

Speaker #1: So, going into H2, I see the trend continuing as long as the equal playing field is maintained.

Mark Gounder: Going into H2, I see the trend continuing as long as the equal playing field is maintained.

Speaker #3: Thank you, CEO. Our next question is from Tanasha Hove from Lorium Capital. The question reads as follows: Good morning. Given the higher LME price and the resultant higher working capital commitment, can you give us some color on where rolling margins are and to what extent the rolling margins are compensating for the working capital drag?

Ayanda Mngadi: Thank you, CEO. Our next question is from Tinashe Hove from Laurium Capital. The question reads as follows: Good morning. Given the higher LME price and the resultant higher working capital commitment, can you give us some color on where rolling margins are and to what extent the rolling margins are compensating for the working capital drag? Let me repeat that. Given the higher LME price and the resultant higher working capital commitment, can you give us some color on where rolling margins are and to what extent the rolling margins are compensating for the working capital drag?

Speaker #3: Let me repeat that. Given the higher LME price and the resultant higher working capital commitment, can you give us some color on where rolling margins are, and to what extent the rolling margins are compensating for the working capital drag?

Speaker #1: Thanks, Amanda, and thanks, Tanasha. Good question. I think on this one I'll answer very clearly: we need to understand the pricing as a whole.

Mark Gounder: Thanks, Ayanda, and thanks, Tinashe. Good question. I think on this one, I'll answer very clearly, is that we need to understand the pricing as a whole. Firstly, higher LME pricing is metal, which, as we always state, is a pass-through to the customers as a whole. One of the key variables also is there's geo premiums that we've seen due, not just due to the high LME price, but also due to geopolitical activities that's been happening, shortage of aluminum in the sector. We've seen geo premiums also adjust accordingly higher. The last part is conversion margins itself. What I think I'm speaking specifically around Hulamin. With our focus on, firstly, a well-established cost reduction plan that we've had over the last two years, and over and above that, with our investment in the wide can body and displacing wide imports.

Speaker #1: Firstly, higher LME pricing is metal, which, as we always state, is a pass-through to the customers as a whole. One of the key variables also is there's geo-premiums that we've seen, not just due to the high LME price, but also due to geopolitical activities that have been happening and the shortage of aluminum in the sector.

Speaker #1: We've seen geo premiums also adjust accordingly higher. And then the last part is conversion margins itself. what I think I'm speaking specifically around Hulamin with us with our focus on firstly a well-established cost reduction plan that we've we've we've had over the last two years and over and above that with our investment in the wide can body and displacing wide imports.

Speaker #1: we've seen an uptake on rolling margins in in particularly for for conversion price should I say for for Hulamin but it's it's definitely a win-win especially with our can customers because from the wide project as we articulated previously they are able to make more cans due to the efficiencies that they will get at the same time we start getting back from the returns from the investment that we've done over the last two years.

Mark Gounder: We've seen an uptake on rolling margins in particularly for conversion price, should I say, for Hulamin. It's definitely a win-win, especially with our can customers, because from the wide project, as we articulated previously, they are able to make more cans due to the efficiencies that they'll get. At the same time, we start getting back from the returns from the investment that we've done over the last two years.

Speaker #3: Our next question is from Rowan Gola from Kronex Research. The question reads: What has been the impact of the Middle East conflict on the aluminum and can market?

Ayanda Mngadi: Our next question is from Rohan Goli from Chronex Research. The question reads: "What has been the impact of the Middle East conflict on the aluminum and can market?

Speaker #1: Okay, on this side, there's actually two; I'll explain it in two ways. First is the cost base—just like all manufacturing companies, I think, in the world, but particularly in South Africa, Hulamin is not dissimilar.

Mark Gounder: Okay. On this side, I'll explain this in two ways. First is the cost base. Just like all manufacturing companies, I think in the world, but particularly in South Africa, Hulamin is not dissimilar. We've definitely seen an uptake, particularly in energy costs, that has gone up substantially, from the time the Middle East conflict started, and we continue to be able to monitor it. Our reaction with regards to how we can continuously maintain our costs, Pravashni mentioned that in H2 we're going after a further ZAR 100 million cost reductions that we've got planned. I think just like all other manufacturers in South Africa, it's not a simple way to just be able to pass that to the customers. You also have to dig deep to be able to continue to strive to be globally competitive. From a market perspective, we've actually seen positive.

Speaker #1: We've definitely seen an uptick, particularly in energy costs. That has gone up substantially from the time the Middle East conflict started.

Speaker #1: And we continue to be able to monitor it. Our reaction with regards to how we can continuously maintain our costs—Pravashni mentioned that in H2 we're going after a further R100 million in cost reductions that we've got planned—and I think just like all other manufacturers in South Africa, it's not a simple way to just be able to pass that to the customers.

Speaker #1: You also have to dig deep to be able to continue to strive to be globally competitive. From a market perspective, we've actually seen positive outcomes due to us being able to source all our metal locally in South Africa from South32, and obviously scrap supplies within South Africa.

Mark Gounder: Due to us being able to source our metal locally in South Africa from South32, and obviously scrap suppliers within South Africa. We've seen an uptick, particularly in Europe, with regards to demand, as a result of Middle East, not only in volume, but also in pricing. Which we're looking into H2 and I think in my commentary that we've put out, that's what we talk about global canning pricing in particular going up.

Speaker #1: we've seen an uptake particularly in Europe with regards to demand as a result of Middle East not only in volume but also in in pricing which which we're looking into H2 and and I I think in my commentary that we've put out that's what we talk about global can in pricing in particular going up.

Speaker #3: And our next question is also from Rowan again, from Kronex Research, and it reads as follows: How long are the specialists going to be retained for the operational skills transfer?

Ayanda Mngadi: Our next question is also from Rohan again, from Chronex Research, and it reads as follows: how long are the specialists going to be retained for the operational skills transfer?

Speaker #1: Okay. So so firstly the one thing key thing that we we we at Hulamin has embarked on is to making sure that we have the special skills and I highlighted four areas that we focusing on right now from coolant to roll grinding to to to casting and so forth.

Mark Gounder: Okay. Firstly, the one key thing that we at Hulamin have embarked on is to making sure that we have the special skills, and I highlighted four areas that we're focusing on right now from coolant to roll grinding, to casting and so forth. These technical experts have been with us from last year, November. Where we are right now is a formalized skills transfer to all levels at Hulamin. That we're looking to complete during H2.

Speaker #1: now these technical experts have been with me from been with us from last year November and where we are right now is a formalized skills transfer to to all levels at at Hulamin.

Speaker #1: And that we're looking to complete during H2.

Speaker #3: Our next question is from Kobe Cilliers from Value Capital Partners, and it reads as follows: "Morning Mark and team, congrats on what looks like a steady and sustainable turnaround."

Ayanda Mngadi: Our next question is from Kobus Cilliers, from Value Capital Partners, it reads as follows: morning, Mark and team. Congrats on what looks like a steady and sustainable turnaround. I just want to ask about post-period production in July. June 2026 production looked very strong with the 527 tons per day. Which month should the ambition of 550 tons per day be likely crossed? Is it still within 2026?

Speaker #3: I just want to ask about post-period production in July. June 2026 production looked very strong with the 527 tons per day. Which months should the ambition of 550 tons per day be likely crossed?

Speaker #3: Is it still within 2026?

Speaker #1: Thanks, Kobus, and thanks for the compliment. Just like you and all other valuable shareholders, I would love that to happen as soon as possible.

Mark Gounder: Thanks, Kobus, thanks for the compliment. Just like you and all other valuable shareholders, I would love that to happen as soon as possible. Right now, based on the steady plan that we have, as the ramp-up goes into Q3 and Q4, we're looking by the end of Q4 to be at the 550 target.

Speaker #1: But right now, based on the steady plan that we have, and as the ramp-up goes into quarter three and quarter four, we're looking, by the end of quarter four, to be at the 550 target.

Speaker #3: Our next question is from Langa Kluane, from Nedbank Limited, and it reads as follows: Given South32's announced sale of its aluminum value chain assets, how does this impact Hulamin, if at all?

Ayanda Mngadi: Our next question is from Langa Twane from Nedbank Limited, it reads as follows: given South32's announcement sale of its aluminum value chain assets, how does this impact Hulamin, if at all?

Speaker #1: Thanks, Ianda. Thanks, Langa. It does not impact Hulamin at all. We basically have got a five-year contract which kicked off last year with South32.

Mark Gounder: Thanks, Langa. It does not impact Hulamin at all. We basically have got a five-year contract which kicked off last year with South32. My engagement's already with South32 post-announcement. I've got confirmation that those contracts will be transferred along and basically on conclusion of the sale, we will engage further. Right now, no impact at all.

Speaker #1: My engagements already with South32 post-announcements—I've got confirmation that those contracts will be transferred along, and basically once, on conclusion of the sale, we will engage further.

Speaker #1: So, right now, no impact at all.

Speaker #3: Our next question is from Alexandra Tatasov from AMR Trading AG. Good morning. What, if any, do you expect to be the operational and financial impact of Alcoa's recent acquisition of the South32 smelter?

Ayanda Mngadi: Our next question is from Alexander Tattersall from AMR Trading AG. Good morning. What, if any, do you expect to be the operational and financial impact of Alcoa's recent acquisition of South32's smelter?

Mark Gounder: Thanks, Alex, for your question. What do we expect? Right now, as I said earlier, nothing changes. Operationally and financially, right now with the Alcoa sales or recent acquisition, to me, there's no changes. It's business as usual. Obviously, there will definitely be further engagements with Hulamin and Alcoa and South32 when the transaction progresses.

Speaker #1: Thanks, Alex, for your question. What do we expect? Right now, as I said earlier, nothing changes operationally or financially. Right now, with the Alcoa sales or recent acquisition, to me there's no change.

Speaker #1: There's business as usual. Obviously, there will definitely be further engagements with Hulamin and Alcoa and South32 as and when the transaction progresses.

Speaker #3: Our next question is from our colleague Deborah Sayers at Hulamin. It says, I might have missed this when the presentation was on, but my question is with extrusions, which has been bought over.

Ayanda Mngadi: Our next question is from a colleague, Debra Sayers at Hulamin. It says, I might have missed this when the presentation was on, but my question is with Extrusions, which has been bought over. Does it positively or negatively impact the business? If it's negative, how do we bounce back from it?

Speaker #3: Does it positively or negatively impact the business? And if it's negative, how do we bounce back from it?

Speaker #1: All right. Deborah, thanks for the question. Firstly, we've mentioned since last year that our focus is on our core business, which is rolling.

Mark Gounder: Debra, thanks for the questions. Firstly, we've mentioned from last year that our focus is on focusing on our core business, which is rolling. Our strategic objective was to disposal or close of disposal of non-core activities. With regards to Extrusions, the sale which has been communicated in all channels, did take effect 1 July. As I think I said, and Pravashni reinforced in the presentation, it will unlock just over ZAR 100 million with regards to proceeds that will flow into H2. We've already highlighted and said that the proceeds are going to be used to reduce our net debt and further enhance our balance sheet.

Speaker #1: Our strategic objective was to dispose, or move closer to disposal, of non-core activities. With regards to Extrusions, the sale—which has been communicated in all channels—did take effect 1 July, and as I think I said, and Pravashni reinforced in the presentation, it will unlock just over R100 million with regards to proceeds that will flow into H2. We've already highlighted and said that the proceeds are going to be used to reduce our net debt and further enhance our balance sheet.

Speaker #3: That brings us to the end of our questions. We don't seem to have any further questions so far. CEO, I think I'll hand back to you.

Ayanda Mngadi: That brings us to the end of our questions. We don't seem to have any further questions so far. CEO, I think I'll hand back to you.

Mark Gounder: Okay. Thank you everyone again, and look forward to our one-on-one engagements for the rest of the week.

Browse all earnings call transcripts

Half Year 2026 Hulamin Ltd Earnings Call

Request TrialDemo

Hulamin

Earnings