Altech shares slump amid interim loss

Allied Technologies (Altech) has reported a R420 million loss in results from operating activities for the six month period ending August 2012, from a R283 million profit in 2011.

At close of play on the JSE, shares in Altech slumped 6.67% to R42.

The group lamented that its results reflect the volatility and challenges presented by the global and local economic environment, which continues to affect many businesses worldwide.

The group’s revenue increased by 6.8% to R5.2 billion, and its operating profit before capital items was 13.5% lower than that of the prior period; this, mainly due to losses incurred in Altech’s operations in East and West Africa.

Altech reported a loss for the period of R586 million, from a profit of R137 million in 2011, while the group announced a diluted basic loss per share of 300 cents, from diluted basic earnings of 137 cents before.

Headline earnings per share decreased by 19% to 127 cents, from 156 cents for the prior period.

“Apart from East and West Africa, the operations within Altech performed to expectations, with Altech UEC returning to a more acceptable profit level,” Altech said.

“Taking into account the continued losses in East and West Africa, the Board has decided to further impair the goodwill and carrying values of certain property, plant and equipment and intangible assets within its East and West African operations. Principally due to these impairments, there was a loss before tax of R485 million,” it said.

Looking ahead, the group noted that it has entered into a Value Added Partner (VAP) agreement with Huawei, an information and communications technology (ICT) company. Under the agreement,

Altech will provide Huawei Enterprise products and services to customers and offer post-sales professional services and support in countries across Southern and East Africa.

“This is expected to contribute well to Altech in the future,” it stated.

Altech said it remains confident that it will resolve the operational challenges in East Africa and return to its normal pattern of growth and profitability. “Altech will continue to pursue acquisition opportunities both locally and internationally.”

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Altech shares slump amid interim loss