w hat ’ s the B uzz ?
ALTRON TMT DRIVES GROUP REVENUE GROWTH FOR THE ALTRON GROUP
JSE listed Allied Electronics Corporation
Limited (Altron) has announced its interim
results for the six months ended 31
August 2014. Revenue increased by 6% to
R14.2 billion supported by revenue growth
from the Altron TMT division. Normalised
EBITDA showed a decline of 10% from
R871 million to R784 million. Headline
earnings per share (HEPS) and normalised
HEPS declined by 12% and 20%
respectively. “The combination of Altron’s
telecommunications, multi-media and IT
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. Against this
performance, the highly disruptive labour
environment prevalent during the period
had a particularly negative impact on
Altron Power. If one adjusts for the financial
impact of the four week long NUMSA
strike in July, Altron’s earnings would have
been broadly in line with the prior year,”
says Altron Chief Executive, Robert
Venter. Altron recorded a particularly
solid six months from the Altron TMT
division which grew revenues by 8% to
R10 billion and EBITDA by 10% to
R702 million. Altech Netstar performed
well and delivered improved margins
due to a number of fleet management
contracts being secured and the launch
of new products in the market. Altech
Autopage was impacted by a weakening
consumer environment and deflating
voice charges. The business is being
repositioned to expand its ISP services
to enterprise clients. Bytes Systems
Integration showed pleasing growth
driven by good demand in South Africa
and margin improvements due to the
weakening Rand in its international
business. Altech Multimedia benefited
from the German based SetOne business
returning to profitability. Altech UEC
was also instrumental in developing the
intellectual property and manufacturing
Altech Node smart home consoles
launched in September 2014. Altron Power
recorded disappointing six month results
with flat revenues but a 47% decline in
EBITDA to R102 million. “The NUMSA
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. In spite of
this, Altron Power will benefit from the
refurbishment of the country’s electrical
infrastructure and renewable energy
projects, whilst the electrification of Africa
will also support longer term growth,” adds
Venter. Whilst 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.