Mustek reopens KZN office as it counts cost of civil unrest
JSE-listed distributor of personal computers Mustek KwaZulu-Natal (KZN) operations have reopened after its premises were looted and destroyed during the violent riots that engulfed the province earlier this month.
Mustek was forced to close shop two weeks ago after the unrest, which was sparked by the incarceration of former president Jacob Zuma.
The reopening of Mustek’s Durban operation comes as the company is still assessing the loss of profit due to business interruption.
The unrest affected Mustek and many other local ICT firms, which were impacted by rampant looting. LG Electronics SA’s Durban-based factory, located at Cornubia Industrial Park, in Sundew Road, Ethekwini, was also affected by the protest action.
Similarly, mobile operators – Cell C, MTN, Telkom and Vodacom – were also forced to temporarily close stores in KZN.
For Mustek, the company has since capped the damage to its KZN operations at R20 million and yesterday announced its business in the province had reopened.
“We are grateful for your incredible patience, kindness and continued support during this transitional period while we rebuild operations in KZN. Local stockholding and custom PC assembly remain significant value drivers for our channel partners. We aim to restore local assembly and distribution as a priority. Those announcements will follow soon. In the interim, we are able to fulfil orders via our centralised warehouse in Midrand, Gauteng,” said regional manager Vishal Chunilall in a statement.
The company said its service department had resumed operations at its new service centre in Pinetown, but the company cautioned that network connectivity to the facility is currently limited.
Despite the disruption of its operations in KZN, Mustek is expecting bumper earnings for the year ended 30 June 2021.
The company, which is headed by CEO David Kan, notified shareholders on Wednesday that headline earnings per share and basic earnings per share will be at least 190% higher than that reported in the previous financial year.
“The group expects that basic earnings per share will be at least 359.75 cents (190% higher than the 124.05 cents reported in the previous financial year); and headline earnings per share will be at least 368.68 cents (190% higher than the 127.13 cents reported in the previous financial year).”
Meanwhile, government announced yesterday it has set aside R36 billion financial assistance and incentive relief to businesses hardest hit by the recent riots in Gauteng and KZN.
Finance minister Tito Mboweni and director-general Dondo Mogajane revealed the economic support package in a virtual press briefing.
Mogajane said the South African Special Risks Insurance Association (Sasria) will be allocated about R3.9 billion “immediately” to support businesses that are in need.
Together with other insurance companies, Mboweni said, Sasria was speeding up the assessment process.
Further to this, employment tax incentives of about R5 billion will be released back to businesses.
“All in all there's about R36 billion in support that we are putting on the table. But we will be interacting within the parliamentary system,” Mboweni said.