Allied Electronics (Altron) on Thursday reported improvements in its full-year earnings for the year ended February 28, recovering somewhat from the battering it has experienced in recent years.

Altron’s headline earnings a share shifted back into positive territory of 71c in the 2017 financial year, compared with the 145c loss posted in the prior year, while the group’s basic loss a share narrowed from 259c in 2016 to a loss of 54c during the financial year under review.

“Despite the challenging economic environment, particularly in South Africa, the continuing operations delivered a credible performance at an operating level. The telecommunications operations generally showed growth, with one exception, while the information technology operations declined compared with the prior year as a result of some major contract losses at the end of the prior financial year,” Altron CEO Mteto Nyati said on Thursday.

Group earnings before interest, taxes, depreciation and amortisation (Ebitda) surged 123% to R840-million during the year, while revenue decreased 26% year-on-year to R19.7-billion.

Altron’s overall net debt decreased from R3.4-billion in 2016 to R1.9-billion in 2017, owing to the disposals and repayment of debt.

“From an operational cash flow perspective, there has been a marked reduction owing to a significant increase in working capital, although a good portion of this is a one-off permanent outflow related to the disposals, particularly of Altech Autopage, and reflects a partial reversal of the exceptional release achieved last year,” Nyati commented.

As the group made inroads into its strategy of repositioning itself as a focused information and communications technology business, the core operations achieved a 7% increase in Ebitda from R888-million in 2016 to R950-million during the financial year under review.

The Ebitda margin improved to 6.8%.

Depreciation and amortisation charges for the 2017 financial year increased to R222-million, resulting in an operating profit improvement of 4% to R728-million and improved operating margins to 5.2%.

Revenue declined by 3% to R13.9-billion during the 12 months to February.

Altron also reported a profit of R415-million from the continuing operations for the year, up from R360-million the year before, with headline earnings dipping to R387-million in 2017 from R425-million in the prior year.

The noncore operations, however, remained lossmaking and traded below expectations, despite significant improvements on the prior year.

The noncore assets, which predominantly operate in the manufacturing sector, included Powertech, Altech Autopage, Altech Multimedia and Altech Node.

The disposal of Altech Autopage at the end of the last financial year and the sale of Aberdare Cables, effective June 2016, resulted in reduced revenue, to about R5.8-billion, for the noncore operations.

Ebitda losses reduced significantly from R512-million in the prior year to R110-million in the 12 months under review, owing to a return to profitability in Altech Multimedia, reduced losses out of Powertech and the reduction in ongoing costs related to Altech Autopage.

The loss after tax of the discontinued operations narrowed from R1.5-billion in 2016 to R717-million in 2017.

Altron believed there was a “high probability” of concluding the disposals of the remaining discontinued operations during the 2017/18 financial year.