Stock in JSE-listed Altron lost 0.44% this morning after the company warned late on Tuesday that earnings would be lower in the first half of the year.
The group said in a trading update issued late on Tuesday that its headline earnings per share would decline by between 10% and 16% year-on-year for the first half of the year to August. Headline earnings per share are seen as a core measure of profitability as the figure strips out non-core items.
Basic earnings per share will drop by between 21% and 31%, Altron noted. A year ago, the group reported headline and basic earnings per share of 82c.
Altron says the month-long metalworkers strike, in July, accounts for a "significant" portion of the decline in earnings, as the National Union of Metal Workers of SA downed tools followed by the extended strike in the mining sector, which hurt the company's power unit in its transformer business.
However, the company's TMT unit - the result of a R1.8 billion buyout of Altech's minorities and the subsequent merger of Altech's and Bytes' telecoms, multimedia and IT units - had a "pleasing" first half, says Altron.
Altron notes the unit grew headline earnings, and the integration has led to "significant" benefits. The merger of the companies has led to a cross-selling approach within the group. Altech Autopage Cellular saw a decline in profitability, but Altron expects a stronger second half, adding Netstar and Bytes performed strongly.
At year-end, Altron reported revenue 12% higher, to a record high of R27.8 billion, while normalised headline earnings per share increased 49%, to 206c. CEO Robert Venter said at the time that he anticipated good growth ahead, as Bytes and Altech continue to grow, and Powertech improves its fortunes.
Altron's interim results will be announced on 8 October.
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