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Wireless roll-out delays see Jasco profit dip 28%
05 February 2010
TIGHT spending by African telecommunications firms contributed to a 28% year-on-year fall in profit to R11,2m for Jasco Electronics in the six months to December, it said yesterday.
Jasco’s telecommunications division, its second-largest contributor of revenue, was hit by “wireless roll-out delays in Africa and a further decline in expenditure on fixed-line networks”, an interim results statement said.
The division saw its operating profit fall 26% to R17,9m, although it “maintained its position in the wireless arena in SA”.
Overall group revenue was R264m, a fall of 18% from the six months to December 2008.
But a financial year comparison showed an increase in revenue of 6%, as Jasco last year changed its year-end from February to June, meaning comparisons on this basis were with the six months to August 2008.
Jasco’s security division had struggled, “after a very strong performance during the 12 months to February 2009”.
“The effect of the recession was particularly felt during the last 10 months when the majority of anticipated projects were postponed indefinitely and the forward order book was negatively impacted.”
But Jasco said that the division had shown a small profit for the period and its business model remained in place.
CEO Martin Lotz said the telecom and security divisions would remain “under pressure for the rest of the financial year”, although he expected to see an improvement “in the next 12-18 months”.
He hoped Jasco would be involved in Cell C’s new R5bn broadband network, announced last month. “The wireless network in SA is mature now, but the penetration of voice and broadband in Africa is tremendously low. There’s a lot of potential for expansion.”
The domestic products division fared relatively well, despite flat revenue growth.
Its operating profit increased to R7,3m from R6,9m in the prior- year period.
Half year 2009 2008
Revenue (Rm) 264 249
Pretax (Rm) 18,429,7
Net income (Rm)12,521,1
Headline EPS (c) 10,1 23,5
Dividend PS (R) —10
Jasco’s telecommunications division, its second-largest contributor of revenue, was hit by “wireless roll-out delays in Africa and a further decline in expenditure on fixed-line networks”, an interim results statement said.
The division saw its operating profit fall 26% to R17,9m, although it “maintained its position in the wireless arena in SA”.
Overall group revenue was R264m, a fall of 18% from the six months to December 2008.
But a financial year comparison showed an increase in revenue of 6%, as Jasco last year changed its year-end from February to June, meaning comparisons on this basis were with the six months to August 2008.
Jasco’s security division had struggled, “after a very strong performance during the 12 months to February 2009”.
“The effect of the recession was particularly felt during the last 10 months when the majority of anticipated projects were postponed indefinitely and the forward order book was negatively impacted.”
But Jasco said that the division had shown a small profit for the period and its business model remained in place.
CEO Martin Lotz said the telecom and security divisions would remain “under pressure for the rest of the financial year”, although he expected to see an improvement “in the next 12-18 months”.
He hoped Jasco would be involved in Cell C’s new R5bn broadband network, announced last month. “The wireless network in SA is mature now, but the penetration of voice and broadband in Africa is tremendously low. There’s a lot of potential for expansion.”
The domestic products division fared relatively well, despite flat revenue growth.
Its operating profit increased to R7,3m from R6,9m in the prior- year period.
Half year 2009 2008
Revenue (Rm) 264 249
Pretax (Rm) 18,429,7
Net income (Rm)12,521,1
Headline EPS (c) 10,1 23,5
Dividend PS (R) —10
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