Altron plunges deep into the red - TechCentral

Altron plunges deep into the red

 

 

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Significant losses at Altech Multimedia and Powertech will contribute to a dismal set of full-year results at technology and industrial group Altron.

The group cautioned shareholders on Friday afternoon that although its Altron TMT division has produced a strong performance from its IT businesses, this was insufficient to offset a decline in profits at Autopage and “significant losses” at Altech Multimedia (effectively the UEC set-top box business) in the year ended 29 February 2016.

Altron has already concluded the sale of Autopage’s subscribers to the mobile operators and, as previously reported by TechCentral, is now in talks to sell Altech Multimedia.

“The Multimedia division experienced significant losses due to a previously disclosed once-off inventory write-off and a material reduction in demand,” Altron told shareholders.

“During the year, it has undergone a rightsizing process, with associated costs, of closing most of its international operations and aligning its cost base with the lower demand levels. Management remains in discussions and negotiations with various third parties to dispose of this business.”

The bad news doesn’t end there for Altron. The group said its Powertech businesses continued to experience a deterioration in their performance resulting in “substantial losses” for the full year.

“Most of the businesses were affected by difficult macroeconomic conditions, namely the worsened situation in the South African economy and the ongoing challenges created by a lack of demand from Eskom.”

The transformers division had “an extremely challenging year, posting a substantial loss”, with plans afoot to dispose of the business.

The sale of Aberdare Cables to China’s Hengtong, meanwhile, is awaiting Competition Commission approval.

On the positive side, Altron’s core IT and technology businesses performed well, it said, despite a challenging economic environment.

When the group reports its full-year results, it intends splitting continuing and discontinued operations.

The entire Powertech group, Altech Autopage, Altech Multimedia and Altech Node have all been classified as discontinued operations for reporting purposes.

“This disclosure provides shareholders with insight into the performance of the core and non-core operations within the Altron group,” it said.

Headline earnings per share (Heps) for the financial year for continuing operations are expected to be between R1,16 and R1,26, or between 8% and 15% lower than a year ago.

In respect of discontinued operations, Heps are expected to be a loss of between R2,65 and R2,75 from a loss of 43c previously.

For total operations (continued and discontinued), Heps will be a loss of between R1,40 and R1,50 compared to a profit of 94c before.

Altron, whose share price closed unchanged at R5,88 on Friday — it has lost 59% of its value in the past 12 months — will publish its results on 18 May.  — © 2016 NewsCentral Media

4 Comments

  1. Great tragedy generally and of course who will feel the ultimate pain of this financial disaster?
    Yup, the innocent employees who will be getting laid off due to…What;s the usual excuse again? Oh yes, operational necessities.

  2. Chicky Lamba on

    Davebee I couldn’t agree more. This is purely an egotistic play. UEC has being a dying business ever since node. Sometimes I life you need to cut your losses and move on. Unfortunately for Altech it’s not the good old days where contracts will just be handed !

  3. every crony business is sure to meet its maker. are the Venters the only people capable of running this company?

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