JSE-listed Altech will return to its historical profit levels, after stopping the bleeding in its African operations, CEO Craig Venter vowed this afternoon.
However, Venter would not provide a time line for when the company will move back into the black as the process will take some time and he does not want to create a rod for his back, he told a media briefing.
The group yesterday evening reported its results for the six months to August and said that, while revenue grew 6.8%, to R5 million, its net profit was hampered by impairments at its East and West African operations.
Altech made a R586 million net loss after writing down East and West Africa to the tune of R676 million, which included around R300 million in impairments in international bandwidth in its East African operation.
However, the rest of the group's operations are solid, says Venter. He says Altech will return to its previous profitable position, which was a 10-year run before the group ran into problems in Africa.
Altech East Africa was profitable for two years after Altech bought its 51% stake in 2008, but then ran into difficulties as key projects were delayed, while the competitive market moved rapidly, says Venter.
Making progress
Venter says the group has made progress in stemming the bleeding and has agreed to sell its 75% stake in Altech West Africa. The entity was started in 2005 and was profitable for five years until it started making a loss, 18 months ago.
West Africa recently lost its pioneer tax status and has also seen demand for its paper-based vouchers decline, which was not bolstered by its chip card business as orders were delayed, Venter explains.
Venter says the disposal will be earnings enhancing as the losses will be eliminated. The formal sale process started in May and the sale agreement - with an unnamed party for an undisclosed amount - was reached this month.
East Africa, which made an operating loss of R89 million in the half year, has benefited operationally from Altech's corporate involvement and internal remedial measures, says Venter. However, the processes have yet to come through in the financials.
Venter says Altech, which is trading under cautionary, has started a formal process to identify and engage with network operators with deep pockets in a bid to find a partner as the operation is capital intensive.
Altech has written both East and West Africa down to nothing.
Share
