Johannesburg - Allied Electronics Corporation (Altron) profits have dropped 27 percent to R360 million for the year ended February, down from the R496m reported in the previous year.
The group said in its annual results presentation that it would focus on areas, such as IT company Bytes, that remained competitive.
From a total operations perspective, revenue declined 4 percent to R26.6 billion and earnings before interest, tax, depreciation and amortisation (Ebitda) declined by 73 percent to R376m. Headline earnings per share also slumped to a loss of 145 cents from the profit of 94c posted in the prior year.
Not enough
Chief executive Robbie Venter said although the company performed strongly in its IT businesses, the performance was not enough to offset the decline in profits and losses incurred at Altech Autopage, Altech Multimedia and the Powertech businesses.
“Many of these businesses were affected by difficult macroeconomic conditions, namely the worsened situation in the South African economy and the ongoing challenges created by a lack of demand from Eskom and other large power users,” Venter said.
“While Altron has made progress on its stated aim of repositioning the group in the telecoms, multimedia and technology space, this process is taking longer than anticipated and, in the meantime, the financial results have been materially impacted by difficult trading conditions, as well as the process itself.”
Venter said the company decided to reposition itself and wind down some operations in a bid to return to profitability. The affected operations include Powertech, Altech Autopage, Altech Node and Altech Multimedia.
“Overall trading conditions remained extremely challenging, which negatively affected the group’s performance, especially in the discontinued operations,” he said.
No dividend
The group said it had decided not to declare a dividend for its financial year as difficult trading conditions bite.
The company’s IT company Bytes recorded a 14 percent rise in revenue from R8.3bn to R9.4bn.
Venter said the group would focus more on being a technology, media and telecoms business and align its corporate structure and overheads into a smaller but more profitable group. He said the focus would be to strengthen the financial position and to reduce debt. Shares price closed flat at R6.20.
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