May 08, 2012
Cables, African impairments knock AltronBack
Construction|Engineering|Africa|Altron|Bytes|Eskom|R6.1|Africa|Kenya|Building|Equipment|Information Technology Subsidiary|Technology|Infrastructure|Robert Venter|Cables|Operations|Information Technology
© Reuse this
Group revenue rose 3% to R23.6-billion (R22.8-billion), but earnings before interest, taxes, depreciation and amortisation (Ebitda) fell 7% to R1.9-billion (R2.1-billion), while adjusted diluted headline earnings a share declined 15% to 206c (243c).
Following “substantial impairments”, the group incurred a loss after tax of R79-million, from a profit of R699-million. Following “substantial impairments”, the group incurred a loss after tax of R79-million, from a profit of R699-million.There were goodwill impairments of R412-million, property plant and equipment impairments of R235-million and intangible impairments of R300-million.
Most of the impairments related to Altech's East African business, which totalled R589-million, while impairments in West Africa totalled R242-million. Altech had decided to disinvest from West Africa, while a turnaround strategy was being pursued at Kenya Data Networks, where a new management team had been assembled.
The results were also impacted by an increase in the effective tax rate as a result of non-recognition of various deferred tax assets on losses in the underperforming operations.
CE Robert Venter said that parts of Altech and Powertech experienced challenging times, while its information technology subsidiary Bytes emerged as the group’s largest contributor. Bytes reported an 11% rise in Ebitda to R527-million, despite flat revenues of R6.1-billion.
Altech’s overall results were negatively impacted by significant impairments in the East and West African businesses. Revenue increased by 3% to R9.97-billion, but Ebitda declined by 14% to R919-million. “We are disposing of the West African business and we have taken significant remedial action in Altech East Africa,” Venter said.
Results at Powertech were negatively affected by its cables business. Overall, revenue increased by 6% to R7.5-billion, but Ebitda fell 7% to R500-million.
The cables unit was hurt by a poor performance from Aberdare International, caused by very difficult economic conditions in Iberia. Demand from the infrastructure sector, including from Eskom and South African municipalities, had been strong.
Venter said that numerous cost-cutting and rationalisation steps had been taken, but that the cables business would only recover once the building and construction sector turned.
Altron would continue to focus on organic and acquisitive growth opportunities in the current financial year.
However, Venter said special attention would also be given to “getting the currently underperforming businesses back on track”.
“Improvement in Altech East Africa is imperative,” Venter said, adding that the focus of the turnaround was on restoring network stability, improving customer relationships and integrating the Rwandan, Tanzanian, Ugandan and Kenyan businesses.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Electricity News
Updated 14 minutes ago Global crude steel output in September, at 134.4-million tonnes, was marginally lower than the 134.5-million tonnes produced in September 2013. According to the World Steel Association (worldsteel), China produced 67.5-million tonnes of crude steel in September,...
Updated 3 hours ago Stand a chance to win a CAT Phone. Subscribe to Engineering News & Mining Weekly at a 30% discounted rate. The weekly print magazines will be posted to your preferred postal address. Also gain online access to: Project Browser - providing an overview of latest...
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
This Week's Magazine
The broad-based black economic-empowerment (BBBEE) alignment process in the con-struction sector has begun, dur-ing which the sector codes of the Construction Sector Charter Council (CSCC) will be aligned with the revised Codes of Good Practice (CoGP), which come...
It is second time lucky for Toby Venter. Ten years ago he negotiated to buy the Kyalami racetrack, but “the deal did not materialise”.
Environmental solutions company I-Cat started construction work on its R22-million, 1 949 m2 environmentally sustainable office and warehouse facility, commissioned by I-CAT Environmental Solutions, at a launch event in October. The new sustainable I-CAT campus,...
Effective file synchronisation and sharing across an organisation’s structures can provide the basis for robust mobile-device and document management while maintaining proper backup, version control and content distribution. These are the lessons learned by complex...
Hotel group Carlson Rezidor currently holds the largest hotel pipeline in Africa with 30 hotels and 6 300 rooms under development. The hotel group develops and operates Radisson Blu in the upper upscale segment and Park Inn by Radisson in the mid-market segment. With...