Altech Annual Report 2005

In the year under review, the satisfactory performance delivered by ABB Powertech Transformers was based on strong growth in the domestic market for medium and large power transformers. This was mainly due to Eskom’s increased requirements for transmission and generator step-up transformers as well as the increase in Eskom’s regional and distribution upgrades and municipal demand which is expected to continue over the next three to ﬁve years. The Desta Power Matla (DPM) order books for 2005

are looking healthy, especially in terms of the large distribution transformer market. This expected increase in municipal orders is based on a requirement to upgrade the local supply networks to meet increasing consumer demand and the alignment of municipal networks into the Regional Electricity Distributors (REDs).

Aberdare Cables had a strong performance from its medium voltage business throughout the year and a solid performance from its local low voltage cable operation.
The expected increase in municipal orders is based on a signiﬁcant anticipated spend to refurbish and/or replace equipment.

Raw material prices, speciﬁcally in terms of copper, aluminium and core iron and steel remain a concern, in particular with regard to the increased demand from China which is creating some shortages in supply.

The Powertech Battery Group had a satisfactory performance for the period under review on the back of buoyant surface traction and stable automotive markets.It was able to capitalise on its distribution network and consolidate its cost base while improved factory efﬁciencies also contributed to this solid result. Our

offshore operations, Dynamic Batteries repositioning in the upper end of the UK market has resulted in a substantial improvement in operating performance. The mining sector, however, suffered the adverse effects of the strong rand resulting in poor demand.

In the building and construction industry our electrical accessories business, Crabtree Electrical Accessories, Yelland Control and Strike Technologies enjoyed a favourable business environment, mainly as a result of lower interest rates and strong activity in the residential building industry which resulted in an increase in demand for product delivery and excellent performance.

The favourable conditions in the power-utility markets were somewhat offset by funding restrictions and project delays at municipal level and the strong rand encouraged imports and price-cutting. These factors impacted, particularly, on Tridonic Atco whose margins came under pressure.

Multi-media

UEC Multi-media (UEC), which develops and manufactures set-top-box (STB) products and associated software remained under pressure due to the continued strengthening of the rand. Personal video recorder (PVR) technology was launched last year to Sky Brazil and Sky Mexico, resulting in increased PVR volumes. Cable-based STBs were launched in Spain. Global Decoder Logistics (GDL) in Sydney, which handles repair, refurbishment and rebirth for a number of

Australian TV operators, has successfully achieved proﬁtability and UEC’s newly formed commercial relationship with MIC in India for the supply of core technology, is an exciting new venture.

Arrow Altech Distribution (AAD) was impacted by the strong rand and as a result the business was streamlined with stringent cost controls and asset management which ensured that AAD remained proﬁtable with a strong balance sheet.