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GRINTEK LIMITED - ANNOUNCEMENT GRINTEK LIMITED Registration no. 1955/00013/06 Share code: GNK Isin:ZAE000003067 The first Quarter ended September 2002 This report is aimed at enhancing shareholders` awareness of the Group`s performance, in line with Group policy that information be shared with the market at regular intervals. Overview Group turnover for the period under review is marginally up on that of the comparable period of the previous year. Prevailing general market conditions in the telecommunications and IT sector continued to restrain prospects for growth in this sector. The defence electronics business performed well on the back of a strong long-term order book. Exports to the European market continue to grow. The composition of turnover between the telecommunications, industrial electronics and defence electronics divisions remains similar to the sectoral breakdown of the previous financial year. The business of the Group remains healthy and well positioned for long-term growth. Telecommunications Although global markets continued to decline, opportunities developed in the local government sector as well as in exports to the southern African region. Growth in the deployment of carrier-class Voice over Internet Protocol (VoIP) technologies by operators throughout Africa remains encouraging. Progress has also been made in the deployment of Synchronous Digital Hierarchy (SDH) technologies in carrier networks in southern Africa. Sales of Time Division Multiplexing (TDM) leased-line technologies have remained stable. The deployment of next generation wireless local loop systems is progressing satisfactorily. The downturn in the global market has resulted in local customers becoming more reliant on support from within the region. Grintek is well positioned to take advantage of these opportunities. Industrial Electronics The power rectifier business, which focuses on the telecommunications and mobile phone market, is performing according to plan. The market in energy management systems remains a key area for future growth. The regulatory environment has eased and new business is expected to materialise during this financial year. The aviation business has successfully completed the installation and commissioning of navigation and air traffic management equipment at the new Kruger and Mpumalanga International Airport. Defence Electronics The system development and production programmes are on schedule, with volumes increasing to meet contractual customer requirements. Products and systems have been well received by our customers and have resulted in further order commitments. Relationships with international partners continue to strengthen through successful joint R&D programmes and joint medium-term marketing. Prospects Export opportunities in the defence electronics sector and the South African energy management market are key focus areas for future growth. The present medium- to long-term defence electronics order book provides the business with a high level of stability. The development of the export market for telecommunications and industrial electronics in the southern African region is heartening as it is based on building infrastructure for sustainable development. Turnover for the first half of the year is expected to be higher than the previous year although prevailing conditions in the telecommunications sector will have a negative bearing on achievable margins. The results expected for the first half of the year should be viewed in the light of earnings generated in the six months to 31 December 2001, which were positively influenced by a dramatic weakening of the Rand last December. With the current trend of a strengthening Rand, it is anticipated that earnings at half year will be significantly lower than in the previous year. Date: 20/11/2002 09:09:27 AM Produced by the JSE SENS Department
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