Altron had a tough first half as the metalworkers' strike and slower demand from a large public sector client dragged down its bottom line, despite a gain in revenue and profit from its Altron TMT unit.
Altron TMT - the combination of a merger between Altech and Bytes that followed Altron's purchase of Altech minority shares - saw its turnover gain 8% to R10 billion, while earnings before interest, tax, depreciation and amortisation improved 10% to R702 million in the six months to August.
However, this improvement did not offset the decline at Altron Power - its PowerTech unit - which was badly affected by the month-long metalworkers' strike and lower orders from one of its large state clients.
In the first half of the year, revenue gained 6% to R14.2 billion, but normalised earnings before interest, tax, depreciation and amortisation dropped 10% to R784 million. CEO Robert Venter says the combination of Altron's telecommunications, multimedia and IT businesses under the Altron TMT division delivered a positive contribution to Altron's results. He anticipates more significant successes as the integration process runs its course.
Stripping out the effect of the strike, Altron's earnings would have been broadly in line with the prior year, adds Venter. He expects the second half to continue to be challenging, although Bytes continues to grow off a large base and Autopage, which is battling price pressures, should have a better period.
Paying off
Autopage is being repositioned to expand its Internet service provider services to enterprise clients.
Among the highlights of the year is Altech's Node video-on-demand system, which Venter says would not have been possible before the merger as it involved collaboration between eight companies in the Altron group.
Venter anticipates more exciting things as the market evolves, noting Node can also be linked up to home automation tools - such as security cameras - and can be used as a hotspot for broadband connectivity, as well as to buy things online.
"The launch of Altech Node is a demonstration of our ability to leverage our own IP through new convergence-based products. To support this, we will continue to refocus our businesses from product-centric to customer-centric backed by the implementation of new systems and structures," says Venter.
Altron TMT group executive, Craig Venter, adds: "We have high expectations for Altech Node, not only in the local market but also in terms of opportunities on a broader global front."
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