Power utility Eskom's expansion programme is starting to seep into the financial results of its suppliers.

Eskom's R340bn plan to upgrade SA's electricity infrastructure over the next five years has left companies like Altron with cash in the bank and sky-high profits.

The technology group's latest set of figures was powered in large part by its power equipment subsidiary Powertech, which increased its revenue by 27% to R8bn and now accounts for almost half of the group's operating profit.

Powertech's operating profit has risen to R914m - the group had a target of R1bn. The turnaround at the division cannot be overemphasised. As recently as the 2004 financial year, it had dropped R60m to R207m.

Eskom's plans are ambitious. It plans to add a further 9 000 MW of power to the 39 000 MW it already has by 2012. It is in the process of recommissioning three mothballed power stations, has plans to build two coal-fired power stations, is upgrading its transmission and distribution system and even has long-term plans to build a series of nuclear plants.

The infrastructure economy is starting to take off. Fixed investment rose from 12,9% to 14% in the final quarter of 2007 against the previous quarter. The ratio of gross fixed capital formation as a percentage of GDP is now 21,2% compared with 19,5% at the end of 2006.

But it is not only Eskom that is driving the growth of Powertech. The rolling blackouts have driven up demand for generators. "We've received about R200m in generator orders - 12 months ago this business did not exist," says Powertech CEO Norbert Claussen.

It is not only generator sales that are up. The company is in talks with the Johannesburg Roads Agency for the installation of solar powered traffic lights and uninterruptible power supply devices.

Altron CEO Robbie Venter says the prospects for the electrical engineering sector stretch well into the future because the timelines for planning this kind of power expansion can be as long as 20 years.

Venter has every reason to be happy. The buoyant results are reflected in the group's share price. Though it is down on last year's high of R56, after it released its full-year results in the beginning of May, it had risen to more than R41 from R37,80.

Altron increased revenue 25% to R21,4bn for the year and operating profit was up 27% to R1,9bn for the year to end-February 2008.

These percentage increases do not truly reflect Altron's success. The group would have to increase revenue by 6% to add R1bn to revenue. It added over R4,2bn.

The scale involved in increasing revenue and earnings in a large organisation like Altron has scared some analysts. So far, the group has proved such fears to be unfounded. "The figures show our business model is correct," says Venter.

Altron's performance has been spectacular - it and rival Reunert once again dominated the electronics & electrical (E&E) sector.

Reunert has been no slouch either. It posted a net profit of R1,1bn in its results for the year to end-September. Net cash at the end of the year was R483m, this was despite it paying R879m to shareholders by way of special (R353m) and normal (R526m) dividends during the year.

Its latest set of half-year results, however, have some analysts optimistic about its prospects. Warwick Lucas of Imara SP Reid says spend on infrastructure, particularly from government and parastatals, will benefit a number of Reunert's market sectors.

Reunert CEO Gerrit Pretorius sees the group continuing to do well. "Reunert should achieve real earnings growth for the full year," he says.

Lucas sees the group's telecom cable operation gaining in the long term from the roll-out of the East Africa Submarine System (Eassy) cable along the continent's east coast.

But it is not only Eassy that is going to make life easy for Reunert and Altron in the telecom sector. The second network operator Neotel's high-speed network is also set to boost the sector's prospects.

While it might be inconvenient to put up with Neotel digging up half the country's roads and pavements, Reunert's cable joint venture with Altron is benefiting from strong demand for instrumentation and fibre cable from the second network operator.

The telecom sector is also set to get a boost from MTN and Vodacom's plans to build their own high-speed data networks.

Altron and Reunert may dominate the E&E sector in terms of revenue and market cap but these minor players have had a more difficult time.

Auto parts supplier Control Instruments, for instance, might have increased revenue 57% to R840m for the year to end-December 2007, but it admitted that it was finding it tough in a softening global auto market.

The local motor industry has not performed any better. Volkswagen SA closed its Uitenhage plant for five days to get rid of excess stock.

Control Instruments' results are also expected to be lower for this financial year because it has unbundled its fleet and vehicle management business, TeliMatrix, to shareholders.

Vehicle tracking group Digicore has a more positive outlook. Revenue not only rose 36% to R440,6m - as operating profit rose 44% to R134m for the year to end-June 2007 - but it also expects to continue to do well on the back of it winning several large tenders.

Digicore is well on track to repeat last year's gains this year, as it grew operating profit 61% to R78,6m in its half-year results.

The vehicle tracking business is clearly a company on the rise. Its exports increased 153% and now account for 63% of total unit sales, up from 50% in 2006.

Telecom equipment and electronics group Jasco is also a smaller player that has done well. Revenue for the year ended February grew 28% to R519,2m and operating profit rose 25% to R49,5m.

Jasco CEO Martin Lotz has every reason to feel pleased. He told Business Day that: "This year marks the delivery on all aspects of our strategy."

The group has consolidated its holding in the sector with it taking a 34% stake in cable group M-Tec for R214,1m.

Delta Electrical Industries, SA's only producer of electrolytic manganese dioxide (EMD), which goes into consumer batteries, has had a hard time. It not only posted a R35,6m operating loss for the six months to June 2007, but it has to face cheaper imports from China.

Added to this, Delta has been hit with a five-year duty for anticompetitive behaviour by the European Union (EU) for selling EMD to EU countries at below cost price.