OREANDA-NEWS. JSE listed Allied Electronics Corporation Limited (Altron) today announced its interim results for the six months ended 31 August 2014. Revenue increased by 6% to R14.2 billion supported by revenue growth from the Altron TMT division. Normalised EBITDA showed a decline of 10% from R871 million to R784 million. Headline earnings per share (HEPS) and normalised HEPS declined by 12% and 20% respectively.

"The combination of Altron's telecommunications, multi-media and IT businesses under the Altron TMT division has delivered a positive contribution to the Group results with more significant successes anticipated as the integration process runs its course. Against this performance, the highly disruptive labour environment prevalent during the period had a particularly negative impact on Altron Power. If one adjusts for the financial impact of the four week long NUMSA strike in July, Altron's earnings would have been broadly in line with the prior year," said Altron Chief Executive, Robert Venter.

Altron recorded a particularly solid six months from the Altron TMT division which grew revenues by 8% to R10 billion and EBITDA by 10% to R702 million. Altech Netstar performed well and delivered improved margins due to a number of fleet management contracts being secured and the launch of new products in the market. Altech Autopage was impacted by a weakening consumer environment and deflating voice charges. The business is being repositioned to expand its ISP services to enterprise clients. Bytes Systems Integration showed pleasing growth driven by good demand in South Africa and margin improvements due to the weakening Rand in its international business.

Altech Multimedia benefited from the German based SetOne business returning to profitability. Altech UEC was also instrumental in developing the intellectual property and manufacturing Altech Node smart home consoles launched in September 2014.

"The launch of Altech Node is a demonstration of our ability to leverage our own IP through new convergence based products. To support this, we will continue to refocus our businesses from product centric to customer centric backed by the implementation of new systems and structures," said Venter.

The Technology Division within Altron TMT, which consists mainly of previous Bytes businesses and the IT assets previously within Altech, delivered excellent results with Bytes Universal Systems, Bytes Secure Transaction Solutions and UK based Bytes Software Services once again delivering strong performances.

"The drive to increase our presence in the public sector saw Bytes Universal Systems perform particularly well whilst our African expansion drive also showed good progress. We are focusing on creating further growth in contributions from these segments," said Venter.

Altron Power recorded disappointing six month results with flat revenues but a 47% decline in EBITDA to R102 million.

"The NUMSA strike had a severe impact on all of our manufacturing businesses but particularly our cables and transformers operations. This was compounded by the indirect effect of the mining strike on our customers and the significant decline in demand from the public sector overall. In spite of this, Altron Power will benefit from the refurbishment of the country's electrical infrastructure and renewable energy projects, whilst the electrification of Africa will also support longer term growth," added Venter.

The Powertech Cables group continued its recovery during the period with local market share being gained in a tight margins environment. Corrective actions are being taken across the Powertech Transformers group to address internal productivity issues at its plants. Although demand remains weak for now, transformers achieved designated product status, which should support recovery once demand returns.

Whilst the second half of the year will present some challenges for the group, the medium term prospects for both Altron Power and Altron TMT remain strong.