Insimbi Industrial : Condensed Results for the Year Ended 28 February 2022, Distribution of Integrated Annual Report and Notice of AGM

INSIMIBI INDUSTRIAL HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number: 2002/029821/06)

Share code: ISB & ISIN: ZAE000116828 ("Insimbi" or "the Group")

SHORTFORM ANNOUNCEMENT: CONDENSED CONSOLIDATED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2022, DISTRIBUTION OF INTEGRATED ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING

PROFILE

Insimbi provides the local and export steel, aluminium, cement, foundry, plastics, paper and pulp industries with resource-based commodities like ferrous and non-ferrous metal and alloys, as well as refractory materials, by integrating the supply, logistics and technical support functions.

FINANCIAL PERFORMANCE
	28 February	28 February
	2022	2021	% Change
Revenue (R'000)	6 058 535	4 909 528	23%
Net profit (R'000)	104 246	43 880	138%
Operating profit (R'000)	206 504	113 518	82%
Cash generated from operations (R'000)	235 787	35 964	556%
Earnings per share (cents)	25,91	10,61	144%
Headline earnings per share (cents)	24,58	10,36	137%

TRADING AND FINANCIAL PERFORMANCE

The 2022 financial year has been an interesting year with many new challenges, while the pandemic continues to affect many economies across the globe in some way. The group has adapted to the "new normal" and has become more efficient and resilient in its operations.

Group revenue increased by 23% from R4,9 billion to R6,1 billion. This increase is attributable to rising commodity prices and an overall improvement in economic conditions globally, as well as in South Africa. Gross profit has increased by 27% from R454 million to R576 million as a result of improved margins supported by the upward trend in commodity prices.

The group posted an operating profit of R207 million, compared to R114 million in the previous year. Operating expenses increased by 11% from R348 million to R386 million. The largest contributors in this area (when compared to the prior year) are fuel and toll expenses (up by 10%), insurance (up by 25%), repairs and maintenance (up by 20%) and employee costs (up by 14%). The increase in employee costs is largely due to the salary sacrifices that were made by all our employees in the prior year, as a result of the pandemic.

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DIVIDEND

Given the uncertainty that prevails in the current local and global markets, the board has elected not to declare a final dividend (2021: nil).

OUTLOOK AND PROSPECTS

Prices for most of our commodities were high during the year. This benefits Insimbi's export and local revenue due to the US$ base pricing of these commodities. We welcome the global move to cleaner production and cleaner metals, as evidenced by China's focus on closing 'dirty' steel plants, among other country-level initiatives. Cleaner metals lie at the heart of our business, and we are finding the appropriate balance for maintaining sales in the face of rising raw material costs.

The long-awaited export duties on recycled ferrous and non-ferrous metal became effective from 1 August 2021, but exporting recycled metals remains a challenge in the current environment. As noted at the interim stage, civil unrest in KwaZulu-Natal and Gauteng in July 2021 closed the vital N3 transport corridor for several days. This was closely followed by the Transnet cyber-attack in August, which forced the state transport utility to declare force majeure at Durban port, with significant reputational damage. The reluctance of shipping lines to dock in Durban in the aftermath produced a months-long logistical bottleneck for both incoming and outgoing containerised goods via that port. We are managing our exports accordingly and communicating constantly with affected clients. These logistics issues were compounded by the 16-day NUMSA strike in October, which again required innovative solutions to meet our contractual obligations.

Going forward, our focus remains on recycling and beneficiating ferrous and non-ferrous metals for supply to local and export clients. Insimbi generates strong positive cash flows and we are steadily de-gearing our balance sheet to facilitate potential strategic acquisitions.

While the integration and rationalisation of acquisitions over the past five years is almost complete, in the short to medium term, our focus is on growing organically by capitalising on existing available capacity without increasing fixed costs.

In conclusion, the group met the challenges of the 2022 financial year head on, reinforcing its resilience under volatile conditions and the commitment of our teams. We are confident about the year ahead for our group. A return to meaningful economic growth in South Africa and any progress on infrastructural development will generate additional tailwinds.

Any forward-looking statements contained in this announcement have not been reviewed nor reported on by the company's auditors.

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DISTRIBUTION OF INTEGRATED ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING

Shareholders of the Insimbi ("Shareholders") are hereby advised that Insimbi's integrated annual report ("Integrated Report"), incorporating the full audited consolidated annual financial statements of the company for the year ended 28 February 2022 ("Annual Financial Statements") and the notice of the annual general meeting of the company ("Notice of AGM") was dispatched to Shareholders today, 31 May 2022.

The Integrated Report and the Annual Financial Statements will also be available on the group's website, at www.insimbi-group.co.zaas from today, 31 May 2022.

Notice is hereby given that the annual general meeting ("AGM") will be held electronically at 10:00 on Wednesday, 6 July, to transact the business as set out in the abovementioned notice of AGM.

Kindly note the following salient details:

Issuer name	Insimbi Industrial Holdings Limited
Type of instrument	Ordinary shares
ISIN number	ZAE000116828
JSE code	ISB
Meeting type	Annual General Meeting
Meeting venue	Electronic communication
Record date - to determine which	Friday, 20 May 2022
Shareholders are entitled to receive the notice
of meeting
Publication/posting date	Tuesday, 31 May 2022
Last day to trade - Last day to trade to	Tuesday, 28 June 2022
determine eligible Shareholders that may
attend, speak and vote at the meeting
Record date - to determine eligible	Friday, 1 July 2022
Shareholders that may attend, speak and vote
at the meeting
Meeting deadline date (For administrative	Monday, 4 July 2022
purposes, forms of proxy for the meeting to be
lodged)
Meeting date	10:00 on Wednesday, 6 July 2022
Publication of results	Wednesday, 6 July 2022
Website link	www.insimbi-group.co.za

SHORT FORM ANNOUNCEMENT

This short form announcement is the responsibility of the directors and is only a summary of the information contained in the full announcement and does not contain full or complete details. The full announcement is available on the JSE's website at https://senspdf.jse.co.za/documents/2022/jse/isse/ISBE/FY2022.pdfand on the group's website at https://insimbi-group.co.za/investor/investor-hub/.The full announcement is available for inspection at the group's registered office (359 Crocker Road, Wadeville, Germiston) and at the sponsor's office (1st floor, Ou Kollege, 35 Kerk Street, Stellenbosch) at no charge from 8:00 to 16:00, Monday to Friday, from 31 May 2022. Copies of the full

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announcement may also be requested from the Company Secretary: MMadhlophe@insimbi- group.co.za.

Any investment decisions by investors and/or Shareholders in relation to the Insimbi's shares should be based on consideration of the Full Announcement, as a whole.

The Annual Financial Statements have been audited by Moore Cape Town Inc. who expressed an unmodified audit opinion thereon. The full auditor's report also includes details of key audit matters. Key audit matters are those that, in their professional judgement, were most significant in their audit of the consolidated annual financial statements. The auditor's report, along with the Annual Financial Statements, are available on the group's website at www.insimbi-group.co.za.

This short form announcement has not been audited or reviewed by the company's auditors.

Johannesburg

31 May 2022

Sponsor

PSG Capital

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