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Africa weighs on Altech

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 25 Apr 2012

JSE-listed Allied Technologies (Altech) saw its net loss widen as East and West Africa experienced “tough trading conditions”, which dragged the company down.

The company this morning reported its results for the year to February and said revenue was higher at R9.97 billion, from R9.65 billion, but its net loss widened to R435 million, from R56 million.

Excluding capital items, Altech made a pre-tax profit of R590 million.

“Results from our East and West African operations were disappointing. However, we remain positive that the remedial measures that we have put in place in East Africa will have a positive effect in the future,” says CEO Craig Venter.

Downtime

Operations in East Africa experienced a tough trading period with financial performance below expectations with a number of challenges, including currency fluctuations, high inflation rates and interest costs, sharp drops in broadband pricing, and network instability due to fibre and undersea cable breaks.

“We are busy restructuring our East African operations into a more regional-focused business entity to provide regional unity and a single interface into key customers. This close collaboration between the regional operations is already having a positive impact on our business in the region,” says Venter.

Venter adds the recent completion of its Kampala-Kigali fibre link has closed the regional ring network; from Mombasa through Nairobi to Kampala to Kigali and back through Tanzania to Dar es Salaam.

“This provides us with a competitive advantage in that we are now able to offer our corporate customers improved high-speed connectivity and network resilience to all their sites and customers in the region,” Venter says.

The rest of the company's operations performed in line with expectations, with most reporting solid growth figures.

“While most operations within the group performed to, or above expectations, the imperative for our non-performing operations is to execute on the defined strategy for each operation to ensure the group as a whole meets its revenue and growth targets going forward,” Venter says.

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