Business
Metair Warns of Major Losses Amid Türkiye Exit and SA Vehicle Production Slump
Metair, a leading manufacturer, distributor, and retailer of automotive components, has warned that its 2024 earnings will take a major hit following its exit from Türkiye and a decline in South African vehicle production.
The company expects a total loss per share of between 2 145.15c and 2 154.95c for the financial year ending December 31, 2024—a stark contrast to the 49c earnings per share reported in 2023. The headline loss per share is expected to range between 185.33c and 212.33c, primarily due to a capital loss on the sale of its Turkish subsidiary, Mutlu.
Metair’s Türkiye Exit and Market Challenges
According to Metair CEO Paul O’Flaherty, the company has spent the past year focusing on cost-cutting, operational efficiency, and customer support while managing external industry challenges.
One of the biggest financial shocks came from the sale of Mutlu, Metair’s Turkish battery subsidiary, which was completed at lower-than-expected net proceeds. While this move helped reduce financial volatility and stabilize the balance sheet, it contributed to the company’s overall loss.
In addition to the Türkiye exit, Metair has been hit by lower production levels at South African vehicle assembly plants. The decline stems from:
- Weaker demand from export markets
- Market share shifts due to rising vehicle imports from China and India
- Toyota South Africa Motors’ engine certification delays, which impacted production volumes significantly
Total local vehicle production declined by 5%, from 649 231 vehicles in 2023 to 615 989 vehicles in 2024. Toyota, one of Metair’s key customers, resolved its certification issues in late 2024, but not before Metair suffered a 28% yearly volume decline.
Bright Spots: Battery Sales Growth and Diversification
Despite these setbacks, Metair has reported growth in battery sales. The Energy Storage division (Rombat and First Battery) saw a 10% increase in automotive battery sales, rising from 3.9 million units in 2023 to 4.3 million units in 2024—driven by strong export demand.
Additionally, Hesto Harnesses, Metair’s major wiring harness supplier, showed signs of recovery after suffering heavy losses in 2023.
Another strategic move for Metair was the acquisition of AutoZone in December 2024. This acquisition is expected to:
- Diversify Metair’s revenue streams
- Reduce dependence on local vehicle manufacturers
- Expand product offerings and sales channels
Stabilization and Future Outlook
O’Flaherty acknowledged the short-term challenges posed by declining volumes and high debt levels but emphasized that Metair is making significant progress with its stabilization and turnaround strategy.
“In South Africa, we are working toward gaining market share by expanding our product range and entering new sales channels,” he said. “The AutoZone acquisition will be a key driver in diversifying our business and reducing reliance on vehicle manufacturers.”
Metair’s final capital restructuring plan is on track and will be presented to the board and funders in March 2025.
As the company navigates industry challenges, its focus on cost optimization, diversification, and efficiency improvements will be crucial in restoring profitability in the coming years.
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