Reunert’s 2021 attributable profit was a meaningful improvement compared with the prior year. The Group benefited from the restructuring and productivity improvement actions implemented in 2020, which created the base for this year’s performance. The Group’s companies generally managed the complex and volatile market environment extremely well to deliver solid operating performances, specifically in the Information Communication Technology (ICT) and Electrical Engineering segments, which resulted in an overall financial performance that demonstrates the resilience and responsiveness of our Group.
All the businesses in the ICT segment performed in line with, or slightly better than, the Group’s expectations. Interest income at Quince Capital (Pty) Ltd (Quince) decreased in line with the lower interest rate environment. Improved performances were achieved in all the other business units in the segment, which delivered a segment operating profit slightly ahead of the prior year.
The Electrical Engineering segment’s recovery was led by a strong performance from its circuit breaker business which included excellent export growth and improved market share in South Africa. This was augmented by the cable businesses which benefited from the prior year actions and much improved factory operational efficiency. Consequently, these businesses delivered a positive operating profit against an operating loss in the prior year.
The Applied Electronics segment had a challenging year as exports reduced because of a COVID-19 related inability to travel and secure new orders as well as long delays in the receipt of export permits from the appropriate authorities.
Despite the positive financial performance, 2021 remained challenging and the Group had four key challenges to contend with. These challenges included: COVID-19 lockdowns both in South Africa and in the Group’s various export markets; the civil unrest in South Africa in July; the delay to secure export permits from the appropriate authorities; and the global electronic component shortage and general supply chain challenges.
These factors prevented the full recovery of our businesses and continue to adversely impact the Group, although we expect this impact to steadily diminish and for the Group’s performance to continue to improve in the year ahead.
Reunert’s 2021 financial result was bolstered by a strong recovery in the Electrical Engineering segment, a good performance in the ICT segment and negatively impacted by the four challenges described above which impeded a stronger performance by the Group and resulted in a poor Applied Electronics segment performance. The Group revenue increased by 19% to R9 575 million (2020: R8 046 million) while the Group’s operating profit grew by 405% to R1 050 million (2020: R208 million restated) resulting in headline earnings per share (HEPS) of 478 cents (2020: 115 cents) and earnings per share (EPS) of 483 cents (2020: 29 cents).
Incorporated in the Republic of South Africa |
PRELIMINARY REVIEWED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - PDF