Tiger Wheels' attributable earnings rose to R114,95 million in the year to June, but company chief executive Eddie Keizan has warned that the strong rand is threatening the development of South Africa’s export-driven economy.

Tiger Wheels' attributable earnings rose to R114,95 million in the year to June, but company chief executive Eddie Keizan has warned that the strong rand is threatening the development of South Africa’s export-driven economy.


The South African-based wheel and tyre group this week said that a higher margin on sales was reflected in the 45 per cent increase in operating income to R219,06 million, off a 17 percent growth in revenue to R2,95 billion.


But Keizan said the volatility of global currencies continued to mask the true performance of the business to the extent that currency movements reduced the group’s operating income in the year by R31,2 million.


"It is disturbing that some authorities in SA contend the rand is not strong enough, and yet expect (SA to have) an export-led economy with further new investment and employment," said Keizan. He said his remarks were targeted at the Reserve Bank.


The greater portion of the group's revenue is derived from sales of aluminium wheels to international car manufacturers and it has wheel manufacturing plants in Germany, Poland, South Africa and the US; wholesale wheel distribution in Europe and South Africa; and tyre distribution in the UK and South Africa.


"Seventy percent or more of our business does not touch SA," said Keizan. He said as well as suffering from the strong rand, the company found it difficult to plan in a volatile global environment.


"Notwithstanding the full order book in all operations, forecasting future earnings is hazardous, given international uncertainty, the world economic slowdown and currency volatility," he added. "If the strength of the rand endures, profit increases in the current year will only be moderate."


Keizan forecast higher sales and profit in almost all business units in the new year, adding that the group’s new plant in Alabama in the US was just weeks away from rolling out its first wheels.

Original article from Car