Reunert has released its preliminary annual results, reporting increases in revenue and operating profit of 16% and 17%. It also saw a 10% overall increase in profit.
Among Reunert’s interests are fibre and electric cable maker CBI, information and telecommunications companies ECN and Nashua, and a 51% stake in battery manufacturer Blue Nova Energy.
The company reported an after-tax profit of R844 million, up 10% from R767 million. Revenue increased 16% to R11.13 billion, from R9.58 billion. Operating profit was up 17% from R1.05 billion to R1.23 billion.
Reunert said it considers operating profit the best metric to measure sustainable profit, with growth realised in all three of its operating segments — electrical engineering, applied electronics, and ICT.
Headline earnings per share increased 9% from R4.78 to R5.19. “Reunert’s 2022 financial performance continued on the positive upward trajectory of the last two years,” the company said.
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“Despite the numerous challenges in the group’s supply chain resulting in additional cash being invested into working capital, the group retained its ability to reward shareholders through an 8% increase in dividends,” Reunert stated.
“The Group expects the impact of the electronic chip shortages and other global supply chain challenges to steadily reduce during the 2023 financial year, allowing for a gradual reduction in working capital.”
Reunert said it suffered from the global electronic chip supply shortages and complex supply chain dynamics. “The situation worsened in the second half of 2022 and resulted in a loss of sales and operating profit at Nanoteq, Omnigo and Nashua.”
Reunert’s cash position was negatively impacted by this, as additional investment had to be made into raw material stock holdings to mitigate stock shortages. “This was compounded by work in progress and trade receivable balances increasing at year-end, as either sales were achieved later than planned or the underlying production commenced later in the year than anticipated,” it said.
“However, there are early signs of an improvement in supply in the electronic component market and supply chains are showing signs of recovery.”
Reunert said that although it is cognizant of the economic uncertainty, its free cash flow generating capacity remains intact. It declared a gross final cash dividend of 224.0 cents per ordinary share, up from 207.0 cents per ordinary share last year. Factoring in 20% withholding tax, the net dividend is 179.2 cents per ordinary share, up from 165.6 cents last year.
SOURCE: My broadband
