Powertech and Altech Autopage have acted as a drag on technology group Altron’s earnings for the six months ended 31 August 2014, but this has been offset, to a degree, by strong performances from IT services group Bytes and other businesses in the group’s TMT division.
For the interim period, Altron’s normalised diluted headline earnings per share fell by 20% to 72c, from 91c a year ago. However, revenue from continuing operations climbed by 6%, reaching R14,2bn.
Bytes was a standout performer, with revenue climbing by 14,4% to R4,3bn and normalised earnings before interest, tax, depreciation and amortisation (Ebitda) rising by 8,7% to R287m.
Altron TMT, which houses the Bytes and Altech assets, reported revenue of R10bn — growth of 8,2% — and Ebitda of R702m, up by 3,1%.
Cellular service provider Altech Autopage, under pressure in a mobile telecommunications industry where voice prices have tumbled in the past year, saw its Ebitda slump by 35,7% to R90m on the back of a 7,2% decline in revenue to R2,7bn.
Autopage is continuing to expand its Internet service provider offerings to business clients in an effort to offset the challenges in the traditional cellular service side of the business, Altron says. It will remain part of the group for now, though the board is “continuously evaluating” its options, Altron CEO Robbie Venter tells TechCentral.
Vehicle tracking company Altech Netstar delivered improved margins due to a number of fleet management contracts being secured and the launch of new products in the market, according to the group.
Altech Multimedia, meanwhile, benefited from its German-based SetOne business returning to profitability.
“The combination of Altron’s telecoms, multimedia and IT businesses under the Altron TMT division has delivered a positive contribution to the group results, with more significant successes anticipated as the integration process runs its course,” says Venter in a statement.
However, Altron’s Power business turned in a poor performance in the six-month period. Although revenue was flat, Ebitda tumbled by 47% to R102m. This was largely the result of a strike by the National Union of Metalworkers of South Africa (Numsa).
“The Numsa strike had a severe impact on all of our manufacturing businesses but particularly our cables and transformers operations,” says Venter. “This was compounded by the indirect effect of the mining strike on our customers and the significant decline in demand from the public sector overall. In spite of this, Altron Power will benefit from the refurbishment of the country’s electrical infrastructure and renewable energy projects, while the electrification of Africa will also support longer term growth.” — © 2014 NewsCentral Media
