Mutlu Akü battery exports take hit over Russia sanctions

Mutlu Akü battery exports take hit over Russia sanctions

Mutlu Akü battery exports take hit over Russia sanctions 600 600 Batteries International

March 13, 2024: Lead battery exports for Turkey’s Mutlu Akü have plummeted by nearly 70% over the past year, largely as a result of the Russia-Ukraine war, Batteries International has learned.

Mutlu’s owner Metair Investments said in a trading update on March 11 the battery maker’s decision to halt sales to Russia in line with European Union sanctions — plus the cancellation of an order from a key US customer — resulted in Mutlu’s exports dropping from 1.7 million units in 2022 to just half-a-million units.

Hyperinflation in Turkey also piled pressure on Mutlu and the manufacturer’s overall sales of automotive batteries in 2023 fell to 3.3 million compared to nearly 5 million the previous year. Aftermarket sales dropped to 1.0 million units (previously 1.6 million).

Turkish interest rates increased to 42.5% and annual inflation peaked at 65%, contributing to a rise in interest costs for the South Africa-based Metair group.

This in turn hurt the wider performance of Metair’s energy storage division, which also includes Romanian lead and lithium company Rombat and South Africa’s First National Battery.

Metair said it expects to post a 17% fall in the group’s combined automotive battery sales for 2023 when it publishes detailed results toward the end of March.

In light of the challenges experienced in Turkey, the energy storage division’s revenue is likely to be flat against the previous financial year, with pre-hyperinflation EBIT margin (before impairments) expected to be between 8.5% and 9.5% (previously 9%), supported by the South African battery business.

However, Metair said top line growth in its automotive components business was improving, thanks to a 20% increase in sales to South African OEMs in 2023 over the previous year, despite supply chain disruptions exacerbated by deteriorating rail and port infrastructure in the country.

Last month, Paul O’Flaherty took over as Metair’s CEO. He succeeded Sjoerd Douwenga — whose resignation for undisclosed health reasons was announced by Metair at the end of 2023.

The group has said previously that plans to sell its energy storage business remain suspended as a result of the geopolitical climate in Europe and global financial instability.