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Altron earnings take a dip

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 16 Apr 2015

Technology group Altron's TMT division has been dragged down by its telecommunications and multimedia businesses.

The company says its TMT division, comprising telecoms, multimedia and IT businesses, has experienced a decline in profit levels in the past year, "notwithstanding the strong performance of the IT businesses".

Altron says the multimedia division was "significantly impacted" by a combination of reduced order intake in its core set-top box business in Africa, the loss of the Samsung TV assembly contract and the impact of the National Union of Metalworkers of SA (Numsa) strike in July last year.

"The business, which has already undergone a significant rightsizing process, has seen its order book improve in recent months and has an encouraging pipeline of local and international prospects, including the SA digital migration program."

The recently launched Altech Node has performed below expectations and Altron TMT says it is "well advanced in terms of exploring alternative opportunities for this business".

Adding this, says the group, the anticipated recovery in the performance of Altech Autopage did not materialise in the second half of 2014, as market saturation and price deflation offset cost saving gains.

The Altron Power division (Powertech businesses) also experienced a deterioration in their performance, resulting in a break-even position at headline earnings level. "Most of the businesses were affected by challenging macro-economic conditions, namely the four week

Numsa strike in July, weak economic growth and the various challenges created by Eskom's current position."

Altron Corporate has also recorded a marked decline in earnings, primarily as a result of the increased interest cost associated with the borrowings taken on to delist Altech in the last financial year. Altron's balance sheet remains resilient and the group continues to be well inside its debt covenants.

Expected earnings

In light of the said market conditions, Altron has informed shareholders it expects the company's headline earnings per share for the financial year ended 28 February 2015 to be between 45% and 55% lower (between 85c and 103c) than the previous financial year (188c).

Basic earnings per share is expected to be between 95% and 110% lower (between 10c and a loss of 19c) compared to the previous financial year (192c).

Altron's normalised headline earnings per share is expected to be between 45% and 55% lower (between 93 cents and 113 cents) compared to the previous corresponding period (206c).

Altron's annual financial results for the year ended 28 February 2015 are set to be announced in mid-May

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