Altech’s share price fell by more than 4% in late afternoon trading on Wednesday after it turned in a huge loss for the financial year ended 28 February.
The JSE-listed technology group, which has had a torrid time in recent years because of the poor performance of its operations outside South Africa, turned in an operating loss of more than R1,2bn on the back of a R1,6bn loss from discontinued operations, which included its troubled businesses in East Africa.
At the same time, Altech has suspended dividend payments to “conserve cash resources” as it attempts to fight its way out of the financial hole it’s in. The share price has lost almost a third of its value in the past 12 months on concerns about its growth prospects.
Headline earnings per share decreased by 23% to 268c from 347c in the 2012 financial year.
In notes accompanying the 2013 financial results, Altech says that with the exception of East and West Africa, its operations performed to expectations, despite weak local and international economic conditions.
“Altech Multimedia, in particular, showed strong growth, with Altech UEC excelling, notwithstanding the delay in the roll-out of digital terrestrial television in South Africa.”
Altech’s management’s team, led by CEO Craig Venter, has moved to get rid of the troublesome assets elsewhere in Africa. In January, Venter announced that Altech was selling its troubled East African businesses in a complex deal that resulted in fibre-optic telecommunications specialist Liquid Telecom taking over the assets. As part of that transaction, Altech has taken an 8,6% stake in Liquid, which operates fibre infrastructure, primarily in the southern and central parts of Africa.
Altech’s East African operations have been struggling for years in a highly competitive market. Once described by Venter as a big growth opportunity for the group, the region later became a noose around Altech’s neck.
Despite the challenges, Altech managed to increase group revenue for the year by 4,7% to R10,4bn.
The group’s biggest operating subsidiary, mobile service provider Autopage Cellular, maintained revenues at similar levels to the 2012 financial year. Pressure on average revenue per subscriber, caused by increasing price competition among networks, was mitigated by improvements in internal processes and customer service, Altech says.
“With the disposal of Altech’s East and West African operations, the group is positioned to return to its normal pattern of growth,” it says. — (c) 2013 NewsCentral Media
