Mixed results from Altech
Summary: Altech announces Interim Results. South African operations show positive results, East Africa disappoints; Positive outlook for second half of financial year
JSE listed Allied Technologies Limited (Altech) today announced the Group’s interim results for the six months ended 31 August 2011.
“The first half of the financial year showed results below our expectations, particularly from our operations in East Africa. However, we are pleased to report that nearly all other operations within the Group performed to, or above, expectations and we remain optimistic that the second half of the financial year will show an improvement,” said Craig Venter, Altech CEO.
“Our strong presence across the Telecommunications, Multi-media and Information Technology sectors is unique to the South African environment. I know of no other corporate that has all three divisions within one group. This presence, together with our strong annuity income at 83% of total revenue, our stringent cost controls and capital management, and our positive cash position and Balance Sheet, effectively spreads risk and enables us to take advantage of opportunities as they arise,” continued Venter.
“During the reporting period we introduced a number of innovative new products and services into the market and made some strategic acquisitions, both locally and internationally, that will enable us to take advantage of new market trends as they arise. At the same time, I have a strong executive team in place that will focus on our East African footprint and enhance the profitability that emanates from these businesses,” said Venter.
Financial highlights for the year ended were as follows:
- Revenue R4.83 billion
- EBITDA R456 million
- EBITDA margin 9.4%
- Operating profit before capital items R296 million
- Operating profit margin 6.1%
- Profit before tax (PBT) R261 million
- Adjusted HEPS 181 cents
- Return on shareholders’ equity 15.4%
- Continued strong balance sheet
The Telecommunications and Wireless Communications Division, which consists of Altech Autopage Cellular, Altech Technology Concepts and Altech Netstar, performed as predicted. This division contributes 71% of group revenue and 76% of group profit.
During the period Altech Autopage Cellular increased its revenue and profits due to an increase in value-added services and pre-paid voucher sales.
“While the mobile market remains exceptionally competitive with aggressive price movements across all product segments, positive signs have appeared with an increase in consumer activity in the various channels,” said Venter.
“Results from Altech Technology Concepts were below expectation, although its Tier-1 network became available to the market in February 2011. While we received excellent customer feedback on this next generation network’s quality, resiliency and back-up capacity; significant costs were incurred and the focus now is to increase revenue by expanding the network’s distribution capacity, both directly and indirectly, over the next two years,” said Venter.
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