Exceptional items knock Reunert

Johannesburg, 22 Nov 2007

JSE-listed Reunert`s strong operational figures for the full year ended 30 September have been diluted by exceptional items.

The company reports a 16% increase in revenue, to R9.5 billion. However, net profit declined 41%, to R498 million. This reduced earnings per share (EPS) and headline EPS (HEPS) by 31% and 48%, to R3.61 and R2.72, respectively.

However, the company has calculated that if exceptional, non-recurring items had been excluded, HEPS would have increased by 15%, to R5.70.

The abnormal items include the effects of the joint venture formed between Reunert`s ATC and Altron`s Aberdare Cable, and the financial impact of its black economic empowerment (BEE) transaction.

The joint venture contributed R152 million in surpluses to Reunert. However, the company`s BEE deal with Peotona Group saw the company incur a R556 million expense. A further share-based payment to group employees, as part of its broad-based empowerment scheme, cost the company R42 million.

Operations on track

Reunert`s electrical engineering division, CBI-Electric, increased revenue by a "pleasing" 29%, to R3.3 billion. However, operating profit of R554 million was similar to that achieved a year ago, it said.

In its electronics division, revenue increased by 15%, to R8 billion, including associated revenue of R1.8 billion.

Reutech, Reunert`s defence business, had an "excellent" year, it says. Revenue in this business increased 55%, to R490 million.

Reunert notes that Siemens Telecommunications had its best year ever, contributing in excess of R120 million after tax profits. Reunert has a 40% interest in the company.