JSE-listed Reunert, which owns Nashua Mobile, says earnings for the first half of the year will be lower, partially due to the slower economic environment.
The group, which issued a voluntary trading statement on Friday, said earnings per share and headline earnings per share will be between 13% and 17% lower; and normalised headline earnings per share will be between 12% and 16% lower in the six months to May. Its share price lost 4.01% ? or 321c ? to close at R76.79 on Friday.
JSE rules require listed companies to alert shareholders once there is a degree of certainty that their results will differ by 20% or more from the previous corresponding period. Reunert expects to publish its first-half results on 21 May.
A year ago, the group said normalised headline earnings per share gained 14%, to 298c. Revenue increased 10%, to R5.7 billion, as all its business segments grew top lines and Reutech and CBi-Electric were "particularly strong".
In the six months to March 2102, operating profit gained 18%, to R736 million, with margin improvement being achieved through "productivity and process improvements".
Tough times
However, in the six months to March 2013, Reunert says it has seen lower revenue, which led to lower earnings. The key reasons for the decline in earnings include the impact of a generally slower economy, as well as delays in various external infrastructure roll-outs that affected its CBi-Electric segment.
The group adds the decrease in the interconnect rates affected the viability of the least-cost routing (LCR) offering at its mobile telecommunications business. "LCR was still a significant profit contributor in the equivalent period last year."
In 2010, the Independent Communications Authority of SA decreed that cellular interconnect costs had to drop to 73c at peak and 65c during off-peak times, from March 2011. Last year, rates dropped to 56c and 52c, respectively. This March, wholesale mobile termination rates dropped to 40c, regardless of the time the call is made.
At year-end, Reunert said incorporating ECN into its Nashua stable was paying off, as ECN delivered a "pleasing result" in both revenue growth and operating profit. Last October, Nashua Communications and Nashua ECN were merged after Reunert bought ECN. The units are expected to have a combined turnover of more than R1 billion a year.
Nashua has been moving customers off its legacy LCR platform onto a new offering.
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