Altech has advised shareholders its expects headline earnings and headline earnings per share to drop by between 20 and 27 per cent for the financial year ended February 28, with the underperformance of its now disposed of East and West African operations.
In a trading statement, the company said it was currently finalising results for the last financial year, with basic earnings per share expected to reflect a loss of between 950 and 970 cents, compared to 283 cents in the previous financial year.
“These reductions are primarily due to poor results in Altech’s East and West African operations, both of which have been disposed of with effect from 28 February 2013,” the statement read. “The remaining operations within Altech are performing satisfactorily.”
HumanIPO reported in January Altech had sold its East African operations to Liquid Telecom, including a 61 per cent stake in Kenya Data Networks (KDN), as well as service providers in the Democratic Republic of Congo (DRC), Rwanda, and Uganda.
The company had been looking to divest of the struggling Kenyan operations in particular for some time. Altech sold off its West African operations in September 2012.
“As shareholders are aware, our East African activities have been problematic and unprofitable, recently, and we have previously expressed the intention to deal effectively with these challenges,” Craig Venter, chief executive officer (CEO) of the Altech Group, said at the time.
Altech’s parent company Allied Electronics (Altron) has also advised its own headline earnings per share for the financial year ended February 2013 are expected to fall by between 27 per cent and 32 per cent.
“Headline earnings per share has been affected by a very challenging second half for the Powertech operations, particularly in the Cables business, as well as the trading losses incurred by Altech´s East and West African operations prior to their disposal,” the group said.
“Basic earnings per share has been affected by a combination of the loss on disposal of Altech´s East and West African operations, as well as the impairments taken at the half year with respect to these same operations.”
HumanIPO reported in March on Altron appearing to have have relaunched its bid to buy out Altech, almost six years after failing with an initial approach.
Both companies issued announcements which warned they were in talks that could affect share prices.
Altron owns 56.48 per cent of Altech, and attempted to take the firm private in 2007, when it offered ZAR4.8 billion (US$517 million) to its minority shareholders, though this deal was scuppered by the Public Investment Corporation (PIC) due to transformation concerns.
