Altron CEO Mteto Nyati said the most painful period over the last six months was the conversations with 600 colleagues who had to be retrenched.
Altron recently released its interim results for the six months ended 31 August, which revealed a strong financial performance in a challenging trading environment.
The company increased revenue by 14% to R8.4 billion while its earnings before interest, taxes, depreciation, and amortization (EBITDA) from continuing operations rose by 17% to R883 million.
Headline earnings per share from continuing operations were up 28% to 83c while basic earnings per share increased by 27% to 85c.
Despite the economic challenges caused by COVID-19, the Altron board still decided to pay an interim dividend of 33c per share, up 14% from the previous interim period.
Nyati said collectively Altron’s operations proved to be resilient during the reporting period, as seen by the increase in the group’s overall EBITDA.
The increase in revenue and EBITDA hides the fact that Altron faced big challenges over the last six months.
Several operations were negatively impacted during the period under review, such as Altron People Solutions, which could not carry out classroom-style training during the lockdown.
Business process outsourcing also operated with reduced staff, negatively impacted revenue which led to an EBITDA loss.
Altron’s most painful period in 2020
Speaking about the impact of the lockdown on Business Day TV, Nyati said “it has been very, very difficult over the last six months”.
He said the company has been facing low volumes, low morale because of all the challenges, and people worrying about their own health.
He said they have seen sales in some of their operations, like their printing business, decline by 50%.
Their training business, which brings people together in their conference facilities, could not operate at all because of social distancing requirements.
“So, what do you do? You have to make some tough calls. We had to sit down with our management team and make those decisions,” said Nyati.
The company subsequently decided to retrench 600 employees through a Section 189 process, and roll-back salary increases which came into effect in May.
“This was the most painful period over the last six months – just having those conversations with colleagues,” said Nyati.
He explained that the retrenchments were necessary to protect the company and ensure it succeeds and grow in future.
Through future growth, Nyati said, the company will hopefully be able to absorb more than the 600 people who lost their jobs.