JSE-listed Siltek has taken action on its promises to address its recent poor interim results, closing down its Australian operations which have drained almost R45 million from the company's coffers in the last six months.
Siltek posted interim results to December showing an operating loss of R39 million for the interim period, compared to an operating profit of R54.8 million for the same period in 1999.
The company pointed to a sharp sustained downturn in demand for IT products in the second half of 2000 and the lack of performance from its Australian operation in particular as the reason for the poor performance.
After evaluating the performance of the Australian division, which comprised a 75% holding in both Agate Technology and Siltek Holdings (both making up Siltek Australia), the board decided to place it under voluntary administration -- similar to the US Chapter 11 bankruptcy.
The board says the closure will "eliminate the continued losses incurred by Siltek Australia and will allow Siltek management to focus its attention on the South African operations".
The financial impact on Siltek's interim results, should the closure have been effective for the six months to December 2000, bring the headline loss per share down to 25.2c, compared to 86.97c.
Similarly net asset value would have increased to 273.6c, compared to 208.9c per share.
Siltek has warned investors that it is still trading under cautionary as it is considering various options relating to the possible restructuring of the company.
Siltek CEO Dave Lello says he cannot comment further on the matter as the company is in a closed period at the moment, with its year-end results due on August 23.
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