Metair sees 70% decline in headline earnings due to KZN floods

South African energy storage and car manufacturing group, Metair, reported a significant decline in headline earnings per share of over 70% due to the impact of the recent KwaZulu-Natal (KZN) floods and ongoing global supply shortages. In a recent interview with CNBC Africa, Riaz Haffejee, the CEO of Metair, shed light on the challenges faced by the company in the first six months of the year. Haffejee highlighted that the flooding in KZN had a major impact on one of their largest automotive components customers, leading to disruptions in operations and financial strain. Despite this setback, the company's insurance coverage for business interruption has provided some relief, and they are currently navigating the claims process. One of the other significant challenges mentioned by Haffejee was the accounting change related to hyperinflation reporting. This change had a negative impact on the company's financial results, making them appear poorer than they actually were on a normalized basis comparable to the same period in 2021. Looking ahead, Haffejee remains optimistic about the recovery in automotive components and the upcoming peak period in the energy storage sector. The company anticipates a good volume potential for the remainder of the year, driven by solid performance in their subsidiaries across different regions. Metair recently launched the Ford Project in Metar, a significant initiative involving five subsidiaries with a total investment of 1.4 billion rands in capital expenditure. Additionally, the company inaugurated a wiring harness factory, representing their largest investment to date. This project is expected to create job opportunities and drive economic growth in the region. In terms of future growth, Haffejee pointed out that automotive components would be a key driver, with a focus on expanding product offerings and customer base. The company aims to achieve substantial revenue growth of over 50-60% in the coming years through diversification and strategic partnerships. In the energy storage segment, Metair sees great potential in various battery technologies, including start-stop batteries and AGM batteries, to meet the increasing demand from original equipment manufacturers (OEMs) and the aftermarket. When addressing the topic of energy plans, Haffejee emphasized the importance of battery storage in renewable energy initiatives. He highlighted the role of energy storage in optimizing energy usage and the growing significance of batteries across different sectors, not just limited to electric vehicles. Haffejee expressed confidence in the future of energy storage, predicting a significant industry transformation in the next decade. Despite facing challenges, Metair remains committed to innovation and growth in the energy and automotive sectors, leveraging their expertise in battery technology and manufacturing capabilities to capitalize on emerging opportunities.