Technology group Altech has reported a 27% decrease in adjusted headline earnings per share, from 529c to 388c, on poor performance from its operations in West Africa and continuing underperformance of its businesses in East Africa.
The group eked out a 3,3% increase in revenues to just shy of R10bn. Operating profit before capital items was 17,5 lower than a year ago. This was “mainly due to losses incurred in Altech’s operation in East and West Africa”, it told shareholders on Wednesday.
The big SA businesses, including Altech Autopage Cellular, met earnings expectations. Durban based decoder manufacturer Altech UEC returned to profit after two years of losses.
Altech has impaired goodwill and the carrying value of its investments in East and West Africa, resulting in a loss before tax of R240m and a total comprehensive loss for the year of R435m.
The dividend payout has been reduced from 356c/share to 248c/share on the back of the poor performance.
Autopage Cellular, the country’s largest independent cellular service provider added a net 48 221 customers, pushing its subscriber base above 1m, though average revenue per user was down due to “ongoing dilution on post-paid airtime revenue”, which it expects will continue as the competition in the cellular market intensifies.
Altech says operating expense management remains a “key activity” at the unit in order to deal with erosion on margins.
The Netstar vehicle tracking and recovery group grew its customer base by just over 20 000 vehicles and Altech says the potential acquisition of a business in South America has made “good progress”.
In East Africa, Altech says it is dealing with the “historical issues” within Kenya Data Networks. “This has taken a lot of management time but certain of these issues have now been resolved or are in the process of being resolved,” it says.
“Another key initiative is restructuring the different East African operations into a more regionally-focused business,” it says. “Closer collaboration between these operations is already having a positive impact and is the first step in providing regional unity and a single interface for key customers.”
Altech says the next step is to implement an “optimal regional operating structure”.
“KDN, specifically, is trading below expectations and has been heavily impacted by the cancellation of a major client’s dark fibre business,” the group says. “On the positive side, the first-floor capacity of the Altech Sameer East Africa data centre is fully taken up and clients have installed their equipment in the data centre.”
It says the turnaround of the East Africa businesses is “clearly a top priority” and is receiving “considerable management attention”.
“Results from our East and West Africa operations were disappointing. However, we remain positive that the remedial measures we have put in place in East Africa will have a positive effect in the future,” says Altech CEO Craig Venter. — (c) 2012 NewsCentral Media
