South African vehicle parts distributor Metair on Tuesday reported a 30 percent decline to 52 cents in diluted headline earnings per share for six months to June 2008 from 74 cents a year ago.

Turnover rose 38 percent to R2.05-billion, while operating profit fell 28 percent to R131-million and profit after tax decreased 34 percent to R82-million.

"We are pleased with our growth in revenue, earned largely on the back of increased vehicle export sales. Margins are under pressure from lower local vehicle sales and a delayed recovery of cost inflation from the weakening Rand and appreciating commodity prices," said Theo Loock, the group's MD.

He added that the group was currently engaged in negotiations with customers to amend its exchange rate and commodity pricing policies to allow for a more responsive adjustment to selling prices.

"We remain volume sensitive and expect volumes to decline in the second half compared to the first half, as the stock in the vehicle supply chain in the local market has increased because of the decline in sales," he said.

Looking ahead, Loock said he had a reasonable expectation that if customers met their planned vehicle production volumes during the second half of the year and the rand did not devaluate any further, Metair will recover most of the under recovery during the second half.

I-Net Bridge