Altron’s sales and profits have tumbled in the financial year to February 2010, driven lower by poor performance by its PowerTech and Bytes subsidiaries. But technology group Altech shielded the group from the worst of the slump.
Group revenue slumped 10%, from R24,8bn to R22,3bn, as a result of weak demand at Powertech amid “challenging market conditions”. Earnings before interest, tax, depreciation and amortisation (Ebitda) fell 11%.
Powertech’s revenue slumped 25% with Ebitda margins falling from 7,7% to 5,%.
Growth in the economy has been slow to return, Altron says in notes accompanying the financial results. “The much speculated economic recovery, which only really started to materialise in the fourth quarter of 2009, has been slow, with fairly muted growth driven by commodity price increases,” it says.
However, the gloom may finally be lifting. “In the first couple of months of 2010, we have seen some positive signs of growth which appear to be more sustainable,” the group, which is led by CEO Robbie Venter (pictured), says of its Powertech business.
Though it managed to keep revenues from slipping, Altron’s IT business Bytes felt margin pressure as a result of “declining margins in a tough trading environment” and non-recurring charges in its retail ATM business. Bytes’s Ebitda fell 8%.
Altech, meanwhile, turned in a much better performance than its group peers, capitalising on strong growth in its telecommunications business in East Africa.
Frost & Sullivan ICT analyst Protea Hirschel says Altech remains the “star in the Altron group”. “The company is well positioned in East Africa, where it is the largest data network provider with significant investments in two undersea cables.” — Staff reporter, TechCentral