Reunert looks to claim bounty on telecoms demand
Reunert expected to report a significant increase in earnings in the coming financial year, as it was getting increased demand for its equipment from telecoms operators such as Neotel, the company said yesterday.
"We are also seeing bigger demand for fibreoptic cable from Vodacom and MTN, which are in the process of rolling out fibreoptic transmission networks on an experimental scale," said Reunert's chief executive, Gerrit Pretorius.
The firm said full-year profit fell 31 percent after it booked a charge for selling a stake to black investors.
Net income fell from R923 million to R639 million in the 12 months to September, said the maker of electric power cables and telecoms equipment. Sales, excluding Reunert's share of Nokia Siemens revenue, rose 16 percent to R9.57 billion.
Excluding the effects of the sale of the empowerment stake and other one-off items, so-called normalised headline earnings rose 14 percent to R5.62 a share from R4.91 a year earlier, the firm said.
Earlier this year, Reunert sold a 10 percent stake to the Peotona consortium, for about R1.1 billion.
Reunert, which also distributes electronic products such as Panasonic and Nashua goods, is benefiting from the longest period of uninterrupted South African growth since the end of World War 2.
A slowdown in spending by consumers because of rising interest rates and the National Credit Act would be "more than offset" by increased investment in electricity and transport by the government and higher capital expenditure by mining firms, said Reunert.
The electrical engineering division, CBI-Electric, increased revenue by 29 percent to R3.3 billion.
However, operating profit of R554 million was similar to that achieved a year ago.
The electronics division increased revenue, including 40 percent of Nokia Siemens's revenue, 15 percent to R8 billion.
The share price shed 1.78 percent to R75.75. The sector lost 1.18 percent.
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