Nashua revenue decline hits Reunert
Listed ICT group, Reunert has reported a 3% decline in revenue to R11.4 billion for the year ended 30 September 2013, from the R11.7 billion recorded the year before.
The loss was mainly due to the holding company’s CBI-electric and Nashua segments, which saw revenue losses of 4% and 6%, respectively.
Reunert’s operating profit declined by 13% to R1,3 billion reflecting the compression experienced in margins due to sales price pressure and increasing costs.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) stood at R1.46 billion, down 12% from R1.66 billion in 2012.
Normalised headline earnings per share declined by 12% from 644 cents to 569 cents.
Reunert declared a cash dividend of 275 cents per ordinary share (2012: 275 cents per share), bringing the total cash dividend for the year to 370 cents.
CBI-electric
In its CBI-electric business, the delay in the expected rollout of national infrastructure projects and reduced capital expansion in the mining industry resulted in the segment not quite meeting expectations this year, Reunert said.
This was reflected in the decrease in revenue of 4% to R3.5 billion.
CBI’s operating profit decreased by 15% to R506 million – from R593 million in 2012 – as a consequence of the reduction in revenue combined with margin pressures, as well as an unfavourable product mix in African Cables, the group reported.
Nashua performance
According to Reunert, its Nashua business faced a challenging year, with the race for customers and declining business confidence impacting performance.
Nashua saw revenue decline by 6% to R6.8 billion (2012: R7.22 billion) – while operating profit declined by 24% to R636 million, from R839 million in 2012.
“Nashua Mobile experienced strong headwinds as competition between mobile operators intensified in a saturated cellular industry,” Reunert said, adding that the further reduction in mobile interconnect rates had an adverse impact on revenue.
Operating profit was dampened by reduced margins due to lower discount rates from Vodacom, Reunert said.
On 15 November, Reunert announced that Nashua’s David Coutinho had stepped down from his position as managing director “to pursue other interests”.
Coutinho’s post will be filled by marketing director of Nashua, Dave Hallas who become acting MD.
Reflecting on the last financial year, Reunert said that the economic and social uncertainties that prevailed at its 2012 financial year-end has continued into 2013, and “the uncertain landscape remains”.
“Consequently, it is difficult to speak of prospects for the forthcoming financial year with clarity and confidence. However, we will continue to act in a considered fashion, with foresight and will pursue sustainable earnings growth,” Reunert said.
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