AG Industries is the holding company for a group of local and international companies that fabricate and distribute value-added glass and aluminium components.
The company has a large share of South Africa's flat glass market and is active in more than 40 other countries internationally
Strong demand, increased revenues
In a statement on Thursday, the group also said it is forecasting a 45 to 50 percent increase in its basic earnings per share for the six-month period.
Providing a brief update on trading conditions for the six months to end-December, AGI said the South African market had been robust with strong demand for its products.
Double-digit volume growth, particularly in the Aluminium and Value Added Glass Divisions, resulted in a 22 percent increase in revenues.
Gross margins increased slightly, even with inflationary cost increases and no corresponding inflationary increase in selling prices.
Increased efficiencies
This was as a result of increased plant efficiencies, which drove down the cost per unit.
The overhead-to-revenue ratio remained unchanged, and operating margins remained at a similar level to those a year earlier.
The group expected its domestic performance to remain strong for the next six-month period as well.
Strong rand hurt export revenues
Internationally, meanwhile, export revenues had been constrained over the past reporting periods due to the strength of the rand.
AGI, whose focus over the past years had been on an export strategy, had been forced to place less reliance on export revenues.
As a result, export revenues and margins had decreased and factories geared around these exports had shifted focus to service the strong growth in domestic markets.
In addition, the international businesses had established strong trade links and operate independently and as stand-alone business units.
Favourable product mixes in Germany and Denmark had resulted in losses being contained, and a steady growth in more profitable lines was expected to return these businesses to profitability.
The UK had performed well, increasing revenues and margins and producing a record set of results.
The US, meanwhile, operated at a marginal loss for the reporting period. AGI is planning to publish its results for the six months to end-December on March 8.
AG Industries expects HEPS up 25-30%
Industrial holding group AG Industries expects its headline earnings per share (HEPS) for the six months to end-December 2004, to be between 25 and 30 percent higher than those for the year-earlier period.