Allied Electronics’ (Altron’s) prospects for the last half of 2014 remained strong as its new Telecommunications, Multimedia and Technology (TMT) unit bolstered group performance, offsetting the negative impact of the turbulent labour environment during the first six months of the year.

The JSE-listed group on Wednesday posted a 12% decline in headline earnings a share to 72c for the six months ended August 31, while basic earnings a share fell, from 62c in the first half of 2013, to 58c in the six months under review.

The group’s total comprehensive income for the period decreased to R195-million, from the R488-million recorded in the corresponding period the year before.

Normalised earnings before interest, taxes, depreciation and amortisation (Ebitda) fell 10%, from R871-million in the six months to August 2013, to R784-million.

The “highly disruptive” labour environment in the period under review had a “particularly negative” impact on Altron Power, which recorded “disappointing six-month results” with revenue remaining flat at R4.2-billion, but Ebitda plunging 47% to R102-million.

“The National Union of Metalworkers of South Africa [-led] strike had a severe impact on all of our manufacturing businesses, but particularly our cables and transformers operations.

“This was compounded by the indirect effect of the mining strike on our customers and the significant decline in demand from the public sector overall,” explained Altron CEO Robert Venter.

However, he pointed out that, if adjusting for the financial impact of the four-week strike, Altron’s earnings would have been broadly in line with the prior year.

Altron’s group revenue increased 6% to R14.2-billion on the back of revenue growth from the Altron TMT division.

“The combination of Altron’s telecommunications, multimedia and information technology businesses under the Altron TMT division has delivered a positive contribution to the group results, with more significant successes anticipated as the integration process runs its course,” Venter commented.

The Altron TMT division reported an 8% growth in revenue to R10-billion and an Ebitda increase of 10% to R702-million.

“While the second half of the year will present some challenges for the group, the medium-term prospects for both Altron Power and Altron TMT remain strong,” Venter stated.