Altech targets 5 million set-top-boxes

Allied Electronics Corporation (Altron) is targeting 5 million set-top-boxes in 2013, through its subsidiary, Altech UEC.

In an interim results announcement for the six months ended August 2013, Altron said that Altech EUC produced excellent results off the back of good sales into Africa for Digital Terrestrial Television.

For the Altron Group, revenue climbed 8% to R13.4 billion, but earnings before interest, taxes, depreciation, and amortisation (ebitda) declined by 4% from R860 million to R826 million.

“Altech UEC has been an excellent performer. Capacity was added to the factory through a R50 million investment and the target is to produce over 5 million set-top-boxes in 2013. The business currently has an order book of over R2 billion,” said Altron chief executive, Robert Venter.

Revenue for Altech UEC Group climbed to R966 million, from R803 million before.

For Altron Group, a non-recurrence of the impairments of the prior period as well as a lower depreciation charge, related to the disposal of Altech’s West African operation, resulted in a profit of R615 million from operating activities, 8% higher than last year’s R572 million.

Altron reported diluted headline earnings per share of 81 cents, from 76 cents in 2012, while normalised HEPS increased 15% to 91 cents.


Altron acquired Altech’s minority shares in August 2013 and integrated the business with Bytes, through the creation of the Altron TMT division.

“Given the effective date, the benefit of these synergies is not yet evident in the results for this period but it is anticipated they will have an effect from the next reporting period,” Altron said.

Revenue for Altech climbed to R5.14 billion, from R5.017 billion, but ebitda declined to R417 million, from R605 million.

On a consolidated total operations level, the Altron TMT Division consisting of Altech and Bytes, increased revenue by 7% from R8.7 billion to R9.3 billion and normalised ebitda by 11% from R616 million to R681 million.

Normalised headline earnings improved 18% to R284 million.

“We believe that the combination of Altron’s telecommunications, multi-media and IT businesses under the Altron TMT division, will help unlock new revenue streams, result in efficiencies and pool talent from the Altech and Bytes entities which will result in innovations and growth opportunities,” said Venter.

Altech Autopage

Revenue at Altech Autopage was marginally down as a result of a decline in the voice environment and a clean-up of the subscriber base, but the business increased ebitda by 14% “showing the benefits of its strategy of bundling products and value adding services along with the traditional voice product”.

Revenue declined to R2.9 billion, from R3.03 billion in 2012, but ebitda was up to R139 million, from R122 million.

The Average Revenue Per User (ARPU) has continued to decline, although ARPUs on new subscribers are encouraging, while churn is being maintained at industry leading levels, Altron said.

Valued-added services and data sales were up and the number of subscribers increased to approximately 1.1 million.

Altech Netstar

The Altech Netstar group achieved revenue growth of 4%. However ebitda declined by 11% with margins impacted by inflationary increases linked to cost of sales, a competitive environment and resultant lower monthly Average Revenue Per Vehicle (ARPV).

Revenue moved to R538 million, from R518 million, but ebitda slipped to R143 million, from R160 million.

“Significant focus is being directed to cost controls and internal efficiencies. Recent wins in the fleet management business and the installation of over 30,000 telematics units for insurance companies to monitor driver behaviour should assist in reversing some of this margin decline going forward,” Altron said.

Looking ahead, Altron said that the recent long-planned acquisition of the Altech minorities’ shares in Altech marks the beginning of a new era for the group.

More on Altron

Altron sees improved earnings

Altech delists from the JSE

Altron trims dividend payout

Altron results marred by Altech impairments

Altron TMT to rise from Altech

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Altech targets 5 million set-top-boxes