/ 13 May 2004

Didata returns to profitability

South African London-listed information technology group Dimension Data (Didata) on Wednesday reported a return to profitability, after two reporting periods of losses.

The group reported interim basic earnings per share of 0,1 US cents for the six months to March 31, 2004, up from a 2,2 US cents loss in the previous comparative period.

Didata reported a profit for the half-year of $1,55-million, up from a loss previously of $28,8-million, while the group’s operating profit was $9,9-million from a loss of $4,5-million before.

The group’s Africa region was the key contributor to operating profit at $10,763-million.

The group’s total operating margin was a profitable 0,8%, up from an operating loss margin of 0,4%. The region with the highest operating margin was Africa at 5,2%.

Turnover for the interim period rose to $1,177-billion, up from $1,088-billion before.

The key regional contributors to turnover were: Africa ($208-million), Australia ($222-million), continental Europe ($221-million) and the US ($195-million).

Didata’s cash holdings stood at $349,5-million at the end of the period, down from $385,7-million before.

“We have made significant progress in a number of areas over the past six months. We are pleased to report good revenue growth, a return to profitability and strong turnarounds in the US, Germany, France and South Africa,” said Didata CEO Brett Dawson.

Looking ahead, Dawson said that the environment remained tough, but the combination of improved demand for information technology services would continue to drive the performance of the group in the second half of the financial year.

“We will continue to focus on profitable growth, margin stabilisation, cost controls and making further progress in improving returns in under performing regions,” Dawson said.

“As outlined at year end, opportunities in our sector of the market have improved and more activity on a regional and global level is evident,” said Didata chairperson Jeremy Ord.

The cost base is closely monitored and productivity per employee has increased, he added.

Didata’s operations in China remain a concern and a concerted restructuring of the company’s business there is underway.

The company’s operations are also being enhanced by closer alignment with its key partners — Cisco, EMC and Microsoft. Sales of Cisco’s Advanced Technologies grew strongly in the six-month period under review. Didata’s global agreement with EMC is opening up good opportunities and Microsoft business is showing strong growth off a low base, Didata said. – I-Net Bridge