Listed cellular tower manufacturer African Cellular (AC) Towers has again reported a net loss, after another difficult period.
The infrastructure company yesterday reported its results for the six months to August and noted that revenue had declined year-on-year from R149.8 million to R102.7 million. Its gross profit moved into a loss of R23.4 million, from a profit of R19 million a year ago.
AC Towers, however, narrowed its attributable loss from R92.3 million to R83.6 million. The company explains the strong rand, the poor health of the economy and a lack of volumes all impacted negatively on its results.
However, despite the lacklustre performance, AC Towers says it is technically solvent and an “aggressive restructuring process” is under way. The company says it will require additional funding to deliver on current and future contracts, and its directors will explore various options to secure funds.
Difficult divisions
AC Towers says it does not anticipate “a marked improvement in trading conditions in the short- to medium-term” for its cellular towers and equipment shelters divisions.
The cellular towers unit was impacted by lower sales volumes, the strong rand and the need to complete loss-making projects in various African countries. As a result, revenue for the unit dropped 49.5%, to R65.4 million, and its trading loss grew to R49.4 million. AC Towers says it is assessing the division's business model.
Equipment shelters delivered disappointing results, as revenue declined 66.8%, to R2.9 million, and a trading loss of R7.4 million was incurred. So far, management and product offering changes have not filtered through, says AC Towers.
However, AC Towers' power lines division performed much better, as revenue leapt 275.2%, to R24.5 million, and a trading profit of R1.6 million was reported. Its fibre optics division grew revenue by 97.2%, to R10 million, but made a trading loss of R15.4 million, because of higher than expected installation costs.
AC Towers' share price closed 20.83% lower yesterday, at 19c, a 5c drop on the day.
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