Our opinion on the current state of METAIR(MTA)
Metair (MTA) is a company that produces energy solutions, primarily batteries, and components for the vehicle manufacturing sector. It operates in Africa, Europe, and the Middle East, with its energy storage business located in Turkey under the "Mutlu" operation. The company is well-positioned to grow as the automotive industry transitions from internal combustion engines to electric vehicles. Metair has announced its intention to split its European acid battery business from its South African automotive components business, which could unlock value in the future.
Regarding the floods in Natal, Metair reported minimal damage to its facilities and a prompt return to normal operations. However, one of its major Original Equipment Manufacturer (OEM) customers suffered significant damage, temporarily suspending production. Metair received a R150 million insurance payout for business interruption related to the floods.
For the six months ending 30th June 2024, Metair reported a 4% increase in revenue, but a headline loss of 3c per share compared to a profit of 41c in the previous period. The company's net asset value (NAV) rose by 12% to 2923c per share. Metair noted that the period required agility and mitigating actions to manage the negative impacts of lower customer demand and volume variability from South African OEMs.
The share price has been on a downward trend since October 2021, and we recommend waiting for a clear break above its downward trendline before considering further investment. Although the share has been rising since June 2024, it has not yet broken through its long-term downward trendline.
On 6th December 2023, Metair announced that CEO Sjoerd Douwenga would resign effective 31st January 2024 due to ill health. On 16th September 2024, the company announced the sale of its entire shareholding in its Turkish operation, Mutlu, for R1.95 billion, which caused a sharp rise in the share price. The sale of Mutlu provides the company with additional capital and could further boost its balance sheet.
Regarding the floods in Natal, Metair reported minimal damage to its facilities and a prompt return to normal operations. However, one of its major Original Equipment Manufacturer (OEM) customers suffered significant damage, temporarily suspending production. Metair received a R150 million insurance payout for business interruption related to the floods.
For the six months ending 30th June 2024, Metair reported a 4% increase in revenue, but a headline loss of 3c per share compared to a profit of 41c in the previous period. The company's net asset value (NAV) rose by 12% to 2923c per share. Metair noted that the period required agility and mitigating actions to manage the negative impacts of lower customer demand and volume variability from South African OEMs.
The share price has been on a downward trend since October 2021, and we recommend waiting for a clear break above its downward trendline before considering further investment. Although the share has been rising since June 2024, it has not yet broken through its long-term downward trendline.
On 6th December 2023, Metair announced that CEO Sjoerd Douwenga would resign effective 31st January 2024 due to ill health. On 16th September 2024, the company announced the sale of its entire shareholding in its Turkish operation, Mutlu, for R1.95 billion, which caused a sharp rise in the share price. The sale of Mutlu provides the company with additional capital and could further boost its balance sheet.
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