Altech posts 34% profit increase

Johannesburg, 30 Sept 2008

Allied Technologies (Altech) has posted strong growth in its interim results, for the six months ended 31 August 2008.

Altech CEO Craig Venter says the local telecommunications division contributed "extensively" to the company`s solid financial results during this period.

"Altech Autopage Cellular`s recent distribution agreement with Neotel, as well as our recent partnership with Kulula, fits perfectly with the company`s business strategy and long history of independence."

Autopage teamed up with Kulula to launch a mobile Internet service that offers 3G packages over 24-month contracts, available on the Kulula Web site. The company has conducted a six-month pilot phase which it says has garnered over 1 000 subscribers.

He says the division`s subscriber base increased by 10 000, a number which Venter attributes to mobile number portability. Autopage is nearing a total of a million subscribers.

Venter says one of the key developments of the period was the ruling by the Pretoria High Court, in favour of Altech, entitling the group to have its existing valued-added network services licence converted into an individual electronic communications network service licence.

"The minister of communications has subsequently brought an application for leave to appeal the decision, which Altech will be opposing. Altech feels not only vindicated to have been pioneers in attempting to break competitive ground in what has long been a closed playing field, but is also confident the ruling will be upheld," adds Venter.

Altech is also pleased with the results from its multimedia division, Altech UEC, primarily in international markets. "We are confident the Indian market will continue to grow substantially considering significant customers have already been secured and we anticipate rapid and considerable growth in the region," adds Venter.

He says, on the local front, UEC has positioned itself as a potential contributor to government`s digitisation plan. According to Venter, government`s plan involves seven million set-top boxes over a three-year period.

Altech is one of many local ICT businesses to post strong financials during an uncertain global economic climate. Says Venter: "Altech has achieved excellent results, despite the fact that both local and international economic trends have been depressed and turbulent."

The company posted an operating profit increase of 34%, to R409 million, and strong revenue growth of 13%, to R4.5 billion. The company`s headline earnings per share were up by 19%, to 261c.