The rand`s weakening towards the end of 2001 affected the domestic margins of Altron company Power Technologies, although it says it had a positive effect on export revenue, vindicating the company`s globalisation strategy.
Powertech`s operating profit for the year to end-February 2002 rose 9.8% on the back of an 11.5% increase in revenue.
<B>Salient figures</B>
Power Technologies results for the year to 28 February 2002
Figures for the previous year in parentheses:
Revenue: R3.74b (R3.35b)
Operating income: R216.39m (R187.05m)
Income before tax: R229.66m (R200.11m)
Income after tax: R178.71m (R154.03m)
Attributable earnings: R138.79m (R116.74m)
EPS: 52.1c (43.4c)
HEPS: 61.2c (48.5c)
Current assets: R2.11b (R1.74b)
Net cash and equivalents: R440.84m (R206.47m)
Current liabilities: R992.49m (R856.64m)
NAV per share: 527.7c (468.4c)
Cash generated from operations: R294.58m (R256.17m)
However, basic earnings per share and headline earnings per share were up 20% and 26.2% respectively.
CE Norbert Claussen says the group has produced good results "notwithstanding global events which have had a marked impact on business and world economies and which exacerbated already difficult trading conditions for the Powertech group".
He adds that these conditions required the group to implement strict expense control programmes and restructuring across all its divisions, with associated costs of R17.5 million.
The rand`s decline resulted in realised and unrealised exchange gains of R53.1 million (2001: R25.9 million) in the operating results from continuing operations.
Claussen says significant progress was made with the group`s empowerment drive. The Ikwezi Group bought 10% of Aberdare Cables and 20% of Renergy Technologies, ABB Powertech Transformers subsidiary Desta Power Matla acquired Power Engineers, and an agreement has been reached to establish a joint venture with Kutlwano Engineering to acquire Alcon Conductors.
Looking ahead, he says conditions in Powertech`s markets show little sign of any significant turnaround in the short-term, which has necessitated the significant restructuring of operations.
The benefits of this were demonstrated in the second half of the financial year and should become evident in coming years, he adds.
While the telecommunications market is expected to remain challenging in the short-term, the continuing increase in demand for bandwidth could signal a turnaround in that market in the near future.
A recent interest rate hike will affect the building and construction industry negatively.
"The year ahead will be one of continued focus on the core businesses locally and abroad, forging and strengthening relationships with strategic and technology partners and ensuring the smooth integration of restructuring efforts undertaken during the year under review," Claussen says.
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