South African ICT group Reunert is reporting a three per cent decline in revenue for the year ending September 30, putting the drop down in part to a decline in fortunes for its mobile and internet solutions business Nashua Mobile.
Reunert’s revenue was down to ZAR11.4 billion (US$1.1 billion), while operating profit declined 13 per cent to ZAR1.3 billion (US$128 million), which it put down to a “compression experienced in margins due to sales price pressure and increasings costs”.
Headline earnings per share (HEPS) have declined by 12 per cent to 569 cents.
Nashua’s revenue decreased by six per cent during the 12 months to ZAR6.8 billion (US$669 million) and operating profit declined 24 per cent to ZAR636 million (US$62.6 million).
“Although an increase in unit sales was reported, this was offset by cost increases due to a weaker rand and supplier price increases, which in a difficult and competitive market could not be passed onto customers,” Reunert said in notes accompanying the results.
“Nashua Mobile experienced strong headwinds as competition between mobile operators intensified in a saturated cellular industry. 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’s other big disappointment was CBI-electric, which saw a revenue decline of four per cent to ZAR3.5 billion (US$344 million).
