Reunert First-Half Profit Falls 14% as Electronic Unit Struggles
Reunert Ltd. (RLO), a supplier to state-controlled fixed-line operator Telkom South Africa Ltd., said first-half profit fell 14 percent as a slowing economy curbed revenue.
Net income for the six months through March fell to 421 million rand ($44.5 million) from 492 million rand a year ago, the Johannesburg-based company said in a statement today. Revenue declined 8 percent to 5.27 billion rand.
A weak rand, slower mining activities and a decline in mobile interconnect rates is hurting the company’s sales and profitability, according to the company.
The decline in profit “was experienced across all segments and is attributable primarily to the prevailing difficult business environment,” Reunert said.
Sales at Reunert’s Nashua unit, accounting for 63 percent of revenue, declined to 3.3 billion rand from 3.6 billion rand. Operating profit at the division fell 23 percent to 311 million rand.
Reunert shares declined for a fifth day yesterday, falling 1 percent to 68.65 rand, giving the company a market value of 13.8 billion rand. The stock has retreated 8.9 percent this year, compared with a 4.7 percent gain in the 166-member FTSE/JSE Africa All Shares Index. (JALSH)
The company will pay an interim dividend of 95 cents for the period, unchanged from a year ago.
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