A slowdown in the telecommunications market saw defence electronics and telecoms group Grintek's report marginally lower earnings for the year to June.
Challenging conditions experienced in the telecoms sector offset improved exports of defence electronic products.
<B>Salient figures</B>
Grintek results for the year to 30 June 2002
Previous year's figures in parentheses, move in square brackets:
Revenue from sales: R1.18b (R1.19b) [-1%]
EBITDA: R183.01m (R192.94m) [-5%]
Operating profit: R155.29m (R170.14m) [-9%]
Profit before tax: R171.72m (R180.4m) [-5%]
Profit after tax: R118.25m (R117.8m) [+0.4%]
Earnings: R104.86m (R113.31m) [-7%]
HEPS: 31.9c (42c) [-24%]
Current assets: R983.77m (R910.83m)
Cash and equivalents: R164.23m (R199.05m)
Current liabilities: R719.07m (R655.79m)
Cash generated from operations: R166.69m (R188.36m)
NAV per share: 139.3c (120.6c)
MD Sybrand Grobbelaar says defence revenue and industrial revenue increased by 27% and 6.6% respectively, while telecommunications revenue fell by 20% in line with market trends, resulting in a 1% drop in total revenue.
The export component of revenue increased by 39.8%, following an 80.8% increase the previous year.
Grobbelaar says the changing composition of revenue from sales, with an increasing component derived from hard currency exports, had a positive effect on earnings.
The foreign exchange gains amounted to R73.4 million (2001: R27 million) gross, excluding additional costs incurred as a result of the devaluation of the rand included in cost of sales and overheads.
"Cash generation in a long-term contracting environment remains paramount and the group has adopted a specific contracting model which strives to maximise positive cash flow throughout the contract execution period."
He says a general slowdown in the telecommunications market contributed to the difficult trading conditions experienced by the telecoms division.
"This was seen in the general hesitancy on the part of enterprise and service providers to invest in new communications infrastructure. Nevertheless, the division made significant progress in deploying new technologies in SA and other African countries.
"Enterprise sales in call centre and general communications infrastructure remain stable. Annuity sales from services and long-term maintenance contracts have increased."
The final dividend was increased to 6.4c from 5.8c previously.
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