Listed electronics company Allied Electronics Corporation (Altron) expects earnings to be higher when it reports its half-year results, but its subsidiary company Altech will not fare as well.
The company says basic earnings per share for the half-year ended to August should be between 16% and 30% higher. Headline earnings per share are expected to be either flat, or 10% higher.
A year ago, the company reported revenue of R12 billion, which was an 8% decline on the previous year. Earnings per share were 63% lower, at 77c.
Altron attributes the increase in earnings to Bytes and Powertech seeing a “marked improvement in their performances during the past six months”, despite the fact that trading conditions have remained challenging.
Challenging period
However, subsidiary company Altech has encountered several short-term challenges that have impacted operating margins, particularly in certain of its large operations. These challenges have reduced earnings to between 20% to 30% when compared with the previous half-year.
A year ago, Altech turned over R4.7 billion, which was a 4% increase and basic earnings per share were 12% higher, at 294c. Altech was the star performer in the Altron stable as Powertech and Bytes took strain. However, its fortunes have slowed due to the global downturn, which has affected some areas of its operations.
It has also pointed to lower margins on submarine bandwidth, reduced cellular interconnection fees, and costs associated with the digital migration programme that has been delayed by government's decision to re-examine its chosen digital standard.
Altech's interim results for the half-year ended are expected to be announced on 28 September, while Altron's results should be out on 5 October.
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