Altech Technologies Limited (Altech) has again reported impressive financial results for the 6 months ended 31 August 2005, with all income, balance sheet and cash flow metrics showing strong positive increases.
Altech, a leading South African high technology group, provides products, solutions and services that capitalise on the convergence of Telecommunications, Multimedia and Technology sectors. Altech is a member of the Altron group of companies.
The company reported an improvement to headline earnings per share by 15.3 percent to 181 cents per share. Revenue increased by 11 percent to R 2,933 billion, with operating income of R250 million. Altechs balance sheet remains strong, with a net asset value of 1528 cents per share and cash of R564 million.
Commenting on the latest interim results, the Chief Executive Officer of Altech, Craig Venter, said that the continued expansion of the company outside of South Africa, a focus on internal cost, project and process controls, a strengthening of its strategic customer relationships, and the roll-out of new products all contributed to the companys pleasing performance. Venter commented that each of Altechs operations across the board performed ahead of their profit expectations, other than Namitech which produced acceptable profitability, but was affected negatively by a third party printing press supply problem, which delayed production by 3 months.
He commented that the resolution and unwinding of the Altech Econet Wireless (AEW) Joint Venture had left Altech in a strong position to continue its telecommunications-related activities into Africa and beyond. The agreement not only has resulted in a R155 million (34%) gain on our original investment of $70 million in a under a year, but we are under no restraints whatsoever, and are actively engaged in continuing our telecommunications aspirations in fast growing markets, particularly Africa. However, Altech will continue with its past acquisition strategies and will investigate all potential acquisition opportunities that fit within our activities of Multi-media, IT and Telecommunications.
Commenting on the various group operations, Venter said that the Telecommunications division has again outperformed expectations. Netstar excelled during the period. They now have approximately 360,000 subscribers in South Africa, and growth is expected to continue apace. The Malaysian customer base is also growing steadily, with 40,000 subscribers on the books. Our plans for Nigerian entry are now solidified, and launch is expected within the next 6 months.
Venter also lauded the performance of the other companies in the Telecommunications division. Autopage continues to grow strongly, to the extent that we were particularly pleased with our ability to maintain the average revenue per user (ARPU) and are well positioned to exploit opportunities that will arise in a recently deregulated and liberalised market. The opportunity to leverage our base of 667,000 subscribers into a broader communication market is highly attractive. In summary, Venter stated Autopage Cellular is exceptionally confident of its long-term future with all of the cellular network operators in South Africa, and signature of agreements with both Vodacom and MTN is imminent. This will compliment the existing agreement with Cell C.
Alcom Matomo, having secured a R500 million tender for the implementation of a Terrestrial Trunked Radio (TETRA) network over a four year period for the South African Police Services, are fulfilling all of its objectives due to strong project management focus. The ongoing success of the SAPS project bodes well for obtaining future network rollouts, currently being tendered to government agencies. Alcom Radio Distributors, distributors of Motorola two-way radios also exceeded its profit budget in an increasingly robust market.. Further adding, Significant export opportunities exist into South African markets and elsewhere.
In the Information Technology division, both Isis, who offer products in the real-time provisioning middleware space, and Altech Card Solutions, who provide card and payment solutions, performed strongly. Although highly profitable, Namitech performed below expectations for the period, However, it is anticipated that the shortfall should be recouped in the next six month period.
Namitech West Africa launched its Lagos facility in Nigeria five months ago and is currently profitable and producing 15 million pre-paid vouchers per month. This factory is now one of the most advanced pre-paid plants in the world, and we have full capacity committed and pre-sold through the end of the financial year.
UEC completed its internal restructuring and process re-engineering and achieved profitability for the period. The company has developed a number of high-end products for a fast growing market, including the worlds first triple tuner Personal Video Recorder (PVR), to be launched by MultiChoice this Christmas period. In addition, UECs new decoder logistics facility in Sydney has reached the point of sustained profitability as it services multiple customers in the Australian market.
Altech Arrow Distribution also reported positive results for the period.
Venter concluded, The market in which we operate is fluid, fast moving and complex, a market which I believe Altech is well positioned to exploit. Convergence opportunities in this space require flexibility and excellence in management and strategy. We are particularly pleased with these interim results in the face of the continued globalisation of our activities.
For additional information contact:
Mr. Craig Venter
Chief Executive Officer: Altech
Group Executive Marketing
Cell: 084 800 8008