Altron hit by 44% profit slump

Johannesburg - Electronics equipment group Allied Electronics Corporation on Monday reported adjusted diluted headline earnings per share of 100c for the six months ended August 31, versus 179c previously, representing a 44% decline.

Altron revealed a decline in revenue of 8% to R12.1bn from R13.2bn earlier. Ebitda declined by 28% with Ebitda margins declining from 10.0% to 7.9%.

The group reported operating profit of R731m against R1.1bn previously, a decline of 35%.

"As a result of lower finance income and greater earnings attributable to minorities due to the increased contribution from Altech East Africa as well as the Powertech Transformers BBBEE transaction, adjusted diluted headline earnings per share declined by 44%. This level of decline represents the comparison between what Altron believes is the bottom of the cycle and the peak that we saw in the first half of last year," the group said.

Looking ahead, Altron said that the recent economic data indicated that the bottom of the economic cycle may have been reached and there are tentative signs of recovery.

"This is consistent with the trends we have seen in our businesses, many of which have reported improved results over the last couple of months.

"Nevertheless, demand levels in the economy remain weak compared to those seen at the peak of the cycle and any recovery is expected to be gradual," Altron said.

Visibility going forward continues to be limited and the strength of the rand is of serious concern given the impact this has on the translation of results from foreign operations, export markets and competition from foreign imports.

"Compared to the first half, it is expected that the second six months should provide an improved performance reflecting better trading conditions and realising the benefits of the rationalisation programmes undertaken during the period under review," the group concluded.

- I-Net Bridge