The Mutlu Turkish division that Metair is disposing of to US-based Quexco for R1.95 billion had higher debt levels that drove up borrowing costs for the South African mobility and energy company, which is now expecting a June 2024 half year loss of between 2.7 cents and 3.3 cents per share.
The expected interim loss per share in the company compares to Metairs per share earnings of 48 cents in the same period last year. Furthermore, Metair has projected a similar interim headline loss per share for the same period compared to headline earnings per share of 41 cents in the year earlier same period.
Metair said yesterday that the Mutlu Group, which forms up Metair Turkey, faced a number of challenges, including a shortage of contract workers and the loss of material export volumes. This had resulted in a drop in profitability for the Turkish division.
Borrowing costs in Mutlu increased significantly due to higher net debt levels particularly at Mutlu Ak to support working capital within tight trading and liquidity conditions.
The company had also incurred additional local net debt to support customer expansion and higher working capital investments. Net finance costs in Metair for the half year period to end June, excluding the impact of hyperinflation,are projected to increase by 45% from R308 million in the prior contrasting period.
