Profits at JSE-listed technology and telecommunications group Altech have fallen sharply in the six months to 31 August as a result, in large part, of pressure on its once high-flying operations in East Africa. Profit for the period was R137m, down from R232m a year ago.

But the group, led by CEO Craig Venter, says it believes “certain of the adverse factors that affected the results of the first six months will not recur in the second half of the financial year”. It says it will continue a “strong focus” on improving the performance of its East Africa businesses and “capitalising on acquisitions and convergence opportunities”.

“Altech East Africa experienced a tough trading period, with financial performance below expectations, and a concerted effort is being made to correct this underperformance,” the group says, adding that it has replaced the management team.

“East Africa presented us with a number of challenges, not least of which was our exposure to currency fluctuations,” says Venter. “While we have reduced our exposure to these fluctuations, we have also implemented a number of turnaround strategies to correct the underperformance of our operations in the region.”

He says there are still opportunities for growth in East Africa, but “execution is now the clear imperative”.

In SA, Altech’s biggest market, the group says its operations are “performing well”. The group’s biggest subsidiary remains cellular service provider Altech Autopage Cellular, which turned in revenue just shy of R3bn during the six month period, up 6,3% from a year ago. Operating profit also expanded at Autopage, with the number of subscribers growing slightly to just over 1m.

Another subsidiary, Altech Netstar, met sales and earnings expectations despite the tough economy and an increasingly competitive market. Altech says offshore growth for Netstar is a “key objective”, with opportunities in South America under consideration.