JSE-listed Africa Cellular Towers (ACTowers) says it is disappointed with its results for the year to February, which saw revenue slide and its previously profitable position reversed.
The company, which designs, manufactures and installs towers for the telecoms and power markets, released its results on Friday. Its disappointing figures sent its share price down 6.25%, to close the day at 45c.
ACTowers says it experienced “significant challenges and tough trading conditions” during the year, which resulted in results coming in below board expectations.
Revenue slowed from R505 million to R227 million, and the company reported a net loss of R92 million, from its previous profit of R51 million.
ACTowers has taken corrective measures, including restructuring units, but expects tough economic trading conditions to continue in the year ahead. The company says, however, it is experiencing an increase in enquiries in both the cellular and power lines industries.
Slower sales
Fast figures:
2010 2009
Revenue: R227.4m R505.4m
Net profit: (R92.3m) R51.3m
HEPS: (22.9c) 19.5c
The company's directors attribute this to the ongoing global economic recession, the strength of the local currency and losses incurred on certain installations in Africa.
In its presentation to investors and analysts, the company noted that there was a downturn in contracts awarded on the continent, as well as a shift in product demand. Eskom held back on awarding tenders as a result of funding constraints, and the fibre optics unit did not perform as expected.
Cellular towers, its biggest contributor to revenue at just over 80%, saw revenue slide 54%, to R192 million. ACTowers says this is due to currency and commodity price fluctuations, and the growing move towards tower sharing rather than building as cellular companies keep an eye on costs.
Its fibre optics division, which reported revenue of R17 million, is being restructured and new management had been appointed. “A number of cellular installation contracts as well as fibre optic contracts were completed at lower than expected profits, or losses in some cases,” says the company.
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