Despite the global economic slowdown and uncertainty in the business environment, analysts believe that Altron remains well positioned due to the diversity in its product portfolio.
The technology group released its annual results today showing a 16% increase in revenues, but a 13% decline in profit for the year. Headline earnings per share also fell by 27%.
Altech was the only one of the group's three subsidiaries to record an operating profit for the year. Operating profit for Altech was up 32%, while it was down 4% for the Bytes Group and 38% for the Powertech Group.
"The global economic crisis has led to a challenging business environment, as it is more difficult to borrow money to purchase products," says Frost & Sullivan ICT analyst Mpho Moyo. "Consequently, there has been a slowdown in sales within the construction sector and the cancellation of orders for IT equipment has negatively impacted on Powertech and Bytes.
"However, Altech has been able to take advantage of the sustained demand for voice and data services within Africa and ongoing infrastructural spend in South Africa."
Moyo says that Altron's global footprint has enabled it to draw from international, local and regional expertise. This gives the group a distinct competitive advantage.
"Altron is however faced with a number of operational challenges," she cautions. "There has been a decline in orders due to the high costs of purchasing products and exchange rate fluctuations are leading to rising cost pressures. The decline in commodity prices has also affected its operations."
Altron's expansion investment is expected to slow due to the global economic uncertainty. Frost & Sullivan does however expect the group to grow organically, with increased focus on consolidation and maximising returns on its existing investments.