Stock in JSE-listed Altech took a knock yesterday, losing 4.27%, after the company posted a wider loss in the year to February and said it would not pay out dividends.
The group reported higher revenue from continuing operations, at R10.2 billion, from R9.6 billion last year. While it made a R357 million profit from continuing operations, it reported a R1.6 billion loss from discontinued operations and a total comprehensive loss of R840 million, after taking into account gains on foreign exchange movements and other income.
Stock in the company slid 160c, to close at R35.90, some 83c higher than its 52-week low, which it hit on 6 February. Its 52-week high is R54.69, which the share price hit almost a year ago. The JSE's all-share index closed 0.1% higher.
Altech says although its revenue increased, operating profit was lower than that of the previous year, mainly due to losses incurred in Altech's operations in East and West Africa.
"Results from our East and West African operations were disappointing. However, with the disposal of these assets, we are now in a position to unlock value from innovation and convergence through our remaining assets, and enhance our activity base by further exploiting our intellectual property," said Craig Venter, Altech CEO.
"Furthermore, the disposal of the East and West African operations will see the termination of operating losses of R165 million in East Africa and R39 million in West Africa, totalling R204 million," Venter said.
At the end of September, Altech agreed to sell its 75% stake in West Africa, because the entity required additional investment and it was costly to run from SA. Subsequently, in January, Altech swapped its troubled East African stake for equity in Liquid Telecommunications, a telecommunications company focusing on developing markets.
Altech's other operations performed to expectations, despite weak local and international economic conditions. "With the disposal of Altech's East and West African operations, the group is positioned to return to its normal pattern of growth," says Altech.
The group, which is trading under cautionary, says, in the last 16 years, it has been acquiring and building a strong portfolio of businesses in the telecommunications, multimedia and IT space.
"We believe we are now in a position to unlock value from innovation and convergence through these assets, and enhance our activity base by further exploiting our intellectual property."
However, Altech says that, as it needs to conserve cash and enhance its current financial position, the board has decided not to declare a dividend for the year. "The position regarding future dividends will be reviewed at the forthcoming interim stage."
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