Reunert has warned its shareholders that headline earnings for its current financial year will be significantly down on those of last year.
Siemens Telecommunications (Sietel), a 40% associate company, has been named as the culprit.
When Reunert announced its interim results in May it said Sietel had performed poorly in the first half, although it was expected to perform better in the second half.
"The anticipated improvement in Sietel has not materialised," Reunert says in its trading update. "Cost overruns on a major contract as well as the significantly lower revenue stream due to the continuing strong rand will result in Sietel incurring substantial losses in the year ending September 2003."
It says that steps are being taken to restore the associate company to profitability.
Reunert says its other businesses are continuing to perform well.
Telecommunications cable manufacturer ATC has turned profitable thanks to cost cuts and an improving order book.
"The group is still experiencing strong cash flows from its wholly owned businesses and cash on hand at the end of the financial year will show a further marked improvement. It is anticipated that the dividend to be declared in November will be at least equal to the 2002 final dividend."
The group says the losses at Sietel are not expected to continue and it expects renewed growth in headline earnings per share in the next financial year.
Share
