Antennae manufacturer Poynting Holdings has discontinued its base station equipment division due to low demand for its products.
Poynting made the announcement in its results statement for the first six months of the year to December, which it released yesterday.
The company had three divisions, which included a commercial unit, a defence division and the now closed base station equipment division. Poynting closed the unit early in the reporting year and retrenched staff to avoid further losses, but didn’t disclose how many employees were let go, ITWeb reports.
Poynting reported revenue up marginally to R33.7 million, from last December’s R32 million. It made a loss after tax of R2.8 million, compared with last year’s profit of R2.3 million.
Despite the loss, the company says it is “optimistic” about its future, due to improved economic conditions and a more robust order pipeline for its defence unit. “Despite the losses experienced in the reporting period, the board is cautiously optimistic of a turnaround going forward.”
Poynting designs, manufactures and supplies antennas and telecommunication products to the cellular, wireless data and defence markets in SA and to export partners in Europe, the US, the Middle East and Asia.
In September, the company said it reversed its loss-making position in the year to June, as orders for antennas from the defence industry picked up.
Cutting its losses
Poynting says the base station division reported an operating loss of R922 679 and wrote off stock worth R704 106. It also saw an impairment of R1.2 million, because turnover was 99% lower in the half year.
The base station unit used to manufacture antennas, diplexers and amplifiers for the African cellular market. Poynting bought Grintek assets from Saab Grintek in 2008, for R2.9 million, to create the unit, which it hoped would “facilitate Poynting’s entry into the base station infrastructure segment of the cellular market”.
Poynting’s commercial unit, which designs and manufactures antennas for wireless data and cellular applications, is operating profitably. Turnover increased 34%, while gross profit grew 49%, leading to a small operating profit.
The defence division designs and manufactures antennas mostly for use in electronic warfare. The division saw a 23% decrease in revenue because of delayed orders. However, the company says the orders currently on hand “are anticipated to stop the gap going forward”.
Its share closed unchanged at 21c yesterday. Its 52-week high was on 2 March at 39c, and its 52-week low was 11c, which it dropped to on 1 February.