JSE-listed electrical wholesaler ARB Holdings expects its results for the second half of the 2010 financial year to show an improvement on that of the previous year, despite recording a 21% drop in net profit for the first half of the financial year.

The group’s net profit fell to R43,7-million in the six months ended December 31, 2009, compared with the R55,4-million achieved in the six months ended December 2008.

Diluted headline earnings a share fell to 15c a share, compared with 19c a share the year before, while revenues declined by 16% to R544-million, compared with the R647-million earned in the first half of the previous financial year.

The group noted, however, that its results for the first half of the current financial year had been an improvement on that of the second half of the 2009 financial year.

ARB Holdings’ power cable and conductor products business, which accounted for more than 60% of the group’s overall revenue, had been negatively impacted on by price deflation and margin pressure.

The business had experienced sales price deflation of between 20% and 25%, with the group noting that market pricing had remained depressed.

Despite a marginal growth in sales volumes, revenues declined by 16% as a result of the price deflation.

Meanwhile, ARB noted that Paragon Electrical, which it acquired for R30-million, would make a modest contribution to the group’s results in the second half of the year. The acquisition becomes effective on March 1.

Going forward, the group would continue to focus on market share growth through acquisitive and organic initiatives, it stated.

ARB also remained confident of the market opportunities in Africa, saying that it would continue to investigate the correct entry points and business models for entering sub-Saharan African countries.