JSE-listed PC supplier Mustek says revenue gained 18.2% in the year to June, but its headline and basic earnings per share have been hit by the volatile rand.
The group on Friday issued a statement in line with the bourse's rules that companies must tell shareholders when their results will differ by more than 20% from the previous period.
Mustek said turnover increased 18.2%, to R4.143 billion, compared with the last financial year. Included in profit from operations is R47 million relating to realised and unrealised foreign exchange losses, compared with a R20.6 million profit last year.
The distributor uses the rand-to-dollar spot rate at the beginning of each month to determine its selling prices and makes adjustments during the month if the exchange rate changes substantially.
Inventory is accounted for at the exchange rate at the time when risks and rewards transfer to the company, and accounting standards do not allow the fair valuation of inventory, but require the corresponding foreign accounts payable to be stated at the closing spot rate.
“As long as this is the case and the rand remains as volatile as it currently is, reported earnings will be in line with the volatilities of the rand.”
As a result, headline earnings per share are expected to be between 15% and 25% lower than the 89.39c reported last year, while basic earnings per share should be between 10% and 20% lower than the 86.38c recorded in 2011.
Mustek's shares closed slightly higher on Friday, gaining 5c or 0.85% to end at R590c.
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