JSE-listed Altech yesterday evening reported a net loss of R586 million, compared with a profit for the first half of last year.
After the publication of its interim results, its share price closed 6.69% ? or R3 - lower, at R42. Altech reported a net loss of R586 million, while a year ago it was in the black to the tune of R137 million.
The group reported revenue higher, at R5.2 billion, for the six months to August, compared with R4.8 billion a year ago, and almost R10 billion at year-end. However, it made a pre-tax loss of R485 million, compared with a gain of R261 million in the first half of last year.
Although revenue increased 6.8%, operating profit was lower than that of the first six months of last year, mainly due to losses incurred in Altech's operations in East and West Africa. The group also said yesterday that it was selling its 75% stake in West Africa.
Altech's network operations in East Africa continue to be challenged; however, there have been some positive improvements with regard to network stability and data centre performance over this period, it says. This has had a material impact on key customer retention and acquisition in Kenya and across the region.
CEO Craig Venter says the company has started talks around introducing partners into its East African operations and will advise shareholders of progress in "due course".
"On the whole, our operations in SA and some international operations are performing well, despite the continuing adverse economic conditions. Of concern are our operations in East Africa and I am confident that we will address these challenges with the major focus going forward being growth of the revenue line while reducing customer churn and managing expenditure," says Venter.
As expected
Altech says its Telecommunications and Wireless Communications Division, which consists of Altech Autopage Cellular - including Altech Technology Concepts - and Altech Netstar, performed as predicted.
However, its Converged Services and Connectivity Division, which consists of Altech Alcom Radio Distributors, Altech Fleetcall, Altech Alcom Matomo, and the East Africa operations, presented mixed results.
The Multimedia and Electronics Division, which consists of Altech Multimedia and Arrow Altech Distribution, performed as anticipated, with Arrow Altech Distribution maintaining its 30% market share in a very competitive environment.
Altech Multimedia, which includes Altech UEC SA, Altech UEC Australia and Altech Multimedia Europe (including Altech SetOne), performed well and is making rapid progress in transforming the business from a manufacturing-focused one to a solutions-based business with profitability now reaching best-in-class industry benchmark levels.
The Information Technology Division, which consists of Altech ISIS, Altech West Africa, Altech Card Solutions, Altech NuPay and Altech Swisttech, delivered as anticipated, with the South African businesses showing good results, while the West African business continued to under-perform, leading to Altech's decision to dispose of its 75% interest in the operation.
"While most operations within the group performed to expectations, the imperative for our non-performing operations is to execute on the defined strategy for each operation to ensure that the group as a whole meets its revenue and growth targets going forward," Venter says.
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