Rand knocks Mustek earnings

Added by Duncan McLeod on 17 August 2012.
Saved under News
Tags: ,

Rand volatility will hit Mustek’s earnings in the financial year ended 30 June 2012, the computer assembler and technology distributor told shareholders on Friday.

For the year, Mustek’s headline earnings per share are expected to be between 15% and 25% lower than the headline earnings of 89,39c in the previous year. Basic earnings per share are likely to be between 10% and 20% lower.

“Mustek uses the rand/dollar spot rate at the beginning of each month to determine its selling prices, with adjustments made during the month should the exchange rate change substantially,” the company says. “Inventory is accounted for at the exchange rate at the time when risks and rewards transfer to the company, and accounting standards do not allow the fair valuation of inventory but require the corresponding foreign accounts payable to be stated at the closing spot rate.

“As long as this is the case and the rand remains as volatile as it is currently, reported earnings will be in line with the volatilities of the rand.”

Included in profit from operations is R47m related to realised and unrealised foreign exchange losses. In 2011, the company made R20,6m in forex profits.

Despite the dip in earnings, Mustek has reported robust top-line growth, with turnover increasing to R4,1bn, up 18,2% in the 2011 financial year.

The company assembles Mecer-branded PCs and laptops and also distributes products on behalf of companies such as Brother, Epson, Acer, Lenovo, Toshiba, NEC, Huawei and Fujitsu. Its share price was trading up by just under 1% at lunchtime on Friday. The counter has risen by 17,2% in the past 12 months.  – (c) 2012 NewsCentral Media

Share this article

Why TechCentral?

We know that as a prospective advertiser, you are spoilt for choice. Our job is to demonstrate why TechCentral delivers the best return for your advertising spend.

TechCentral is South Africa’s online technology news leader. We don’t say that lightly. We believe we produce the country’s best and most insightful online tech news aimed at industry professionals and those interested in the fast-changing world of technology.

We provide news, reviews and comment, without fear or favour, that is of direct relevance to our fast-expanding audience. Proportionately, we provide the largest local audience of all technology-focused online publishers.

We do not constantly regurgitate press releases to draw in search engine traffic — we believe websites that do so are doing their readers and advertisers a disservice. Nor do we sell “editorial features”, offer advertising “press offices” or rely on online bulletin-board forums of questionable value to advertisers to bolster our traffic.

TechCentral, which is edited and written by award-winning South African journalists, cares about delivering top-quality content to draw in the business and consumer readers that are of most interest to technology advertisers.

We’d like the opportunity to demonstrate the value of directing a portion of your advertising budget to TechCentral, whether your company is in the technology field or not. Numerous opportunities exist for companies interested in reaching our audience of key decision-makers in South Africa’s dynamic information and communications technology sector. We offer packages that will deliver among the best returns on investment available in the online technology news space.

For more information about advertising opportunities, and how your organisation can benefit by publicising itself on TechCentral, please call us on 011-792-0449 during office hours. Or send us an e-mail and ask for our latest rate card and brochure.