Altech slumps to R485m pretax loss
Impairments hit JSE-listed technology group hard, but management remains confident the East Africa business can be turned around. By Duncan McLeod.
Altech’s headline earnings per share in the six months ended 31 August 2012 have fallen by 19% over the same period in 2011 as the result of continued poor performance by its businesses in East and West Africa.
Due to write-downs in goodwill and the carrying value of those businesses, Altech has reported an accounting loss before tax for the six months of R485m.
The JSE-listed technology group’s revenue rose by 6,8% to R5,2bn, while operating profit before capital items was 13,5% lower. It says that apart from East and West Africa, it’s businesses performed to expectations, with Altech UEC, the Durban-based manufacturer of decoders and set-top boxes, returning to a “more acceptable profit level”.
In a statement to shareholders, the group says it is “confident that it will resolve the operational challenges in East Africa and return to its normal pattern of growth and profitability”. It has reached a deal to dispose of its 75% interest in the West African business.
The group’s largest subsidiary, mobile service provider Altech Autopage Cellular, increased its operating profit by 3,7% on the back of a rise in revenue of 0,3%. The slow growth, it says, is due to a contraction in mobile airtime revenue and slower than expected Internet service provider revenue growth. This was mitigated by increased prepaid and value-added service revenues.
Average revenue per user for the period, including value-added services, fell by 12,5% due to the acquisition of customers on hybrid tariffs, lower spend due to additional value in network price plans and general consumer pressure.
Altech says ongoing dilution on post-paid airtime revenue — as illustrated by falling revenue per user — is expected to continue as the mobile networks release new products at lower prices and offer heavily discounted tariffs for data in an increasingly competitive market.
Vehicle tracking company Altech Netstar grew revenue by 4% in the six months over the same period in 2011, with a net growth in subscribers of 14 000, bringing the active base in SA to nearly 540 000 vehicles.
Altech CEO Craig Venter will present the group’s interim results to shareholders on Thursday. TechCentral will bring you an interview with him later in the day. — (c) 2012 NewsCentral Media