Allied Electronics Corporation (Altron) increased headline earnings per share by 10.1% in the half-year to August, although revenue and operating profit were both down by more than 18%.
<B>Salient figures</B>
Allied Electronics Corporation results for the six months to 31 August 2003.
Figures for the year-earlier period in parentheses:
Revenue: R5.06b (R6.2b)
Operating income: R330.07m (R406.92m)
Income before tax: R370.84m (R724.82m)
Attributable earnings: R169.8m (R308.84m)
EPS: 62.5c (114.9c)
HEPS: 64.1c (58.2c)
Current assets: R4.41b (R5b)
Cash and equivalents: R1.64b (R1.24b)
Current liabilities: R2.41b (R2.77b)
NAV per share: 839.7c (820.4c)
Cash generated by operations: R368.17m (R465.8b)
CEO Robert Venter says the 18.3% drop in revenue, from R6.2 billion to R5.06 billion, was largely due to the disposal of Alcatel Altech Telecoms, the securitisation of the Fintech assets, accounting changes in some jointly managed operations, as well as the strengthening of the rand.
As a result, operating profit fell by 18.9% from R406.92 million to R330.07 million.
"The effect of high interest rates and rand strength has been felt throughout the economy and Altron`s operations have not escaped their impact," Venter says. "Altron`s revenues from exports and foreign operations have consequently declined from 31% to 16% of total revenues. This has been partially compensated for through aggressive expansion into local markets."
The telecommunications markets remained under pressure and Altron`s telecoms interests, accounting for 35.2% of revenue and 30.1% of operating income, continued to experience difficult trading conditions.
The power electronics and multimedia sector contributed 36% of total turnover, down from R2.3 billion to R1.8 billion due to the effect of the stronger rand and consequent increased international competition. Abderdare Power Cables, ABB Powertech Transformers and the Industrial Group performed strongly.
The IT sector continued 28.5% of total revenue, falling from R1.9 billion to R1.4 billion. Venter says this is mainly because of significantly reduced revenues from BTG`s UK businesses. The sector contributed 26% to total operating income, down from R93 million to R86 million.
"The corrective action taken in rightsizing certain operations, particularly those in the infrastructural telecommunications sector, are expected to show benefit in the second half of the year," Venter says. He expects that group earnings for the year to February 2004 will be at similar levels to those of the previous year.
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