Didata shows 8% rise
INTERNATIONAL IT giant Dimension Data bucked the global economic trend by posting strong interim results for the first six months of the financial year.
The company’s chief executive, Brett Dawson, told shareholders and investors that group revenues had increased by 8.1percent to 1.95-billion for the six months ended in March 2009.
Among those present were Andile Ngcaba, whose empowerment vehicle, Ngcaba Holdings, owns 12.71percent of Didata South Africa.
The JSE-listed company’s share price had also recovered from a low of about R4/share in November 2008 to its current levels of about R6.30.
The group managed to boost its operating profit by 37.4percent during the six-month period courtesy of cost-cutting exercises.
Dawson said: “It’s slightly higher than what we projected last year. We managed to control our costs and reduce our break-even point in the US market while continuing to invest conservatively.”
In the US, many of Didata’s major clients cut capital expenditure spending, resulting in a dip of 24percent in revenue and operating profits crashing by 72percent.
In response, Didata cut its staff at its US operation by 9percent.
In Asia, the group also laid off 4percent of its employees in response to a 2percent dip in revenue in that region.
In the Middle East and Africa, which is seen as still playing catch- up with the rest of the world in terms of technology infrastructure, the company made the strongest gains with a 30percent increase in revenue.
Operating profits rose by 19percent from last year.
Dawson said the group’s product services business fell by 3percent due to reduced capital expenditure (mainly in the financial services industry). But the managed services division was able to grow by 24percent.
“We think our business model has real sustainability,” he said.
“Our services division is still significant as clients want us to continue maintaining their infrastructure as they expand their businesses.”
Spiwe Chireka, an ICT analyst at Frost & Sullivan, said Didata had successfully managed to adapt to the changing economic environment by increasing its focus on providing integrated solutions rather than product sales.
She said: “The recession has affected various parts of the world differently, and Didata’s wide geographic footprint has cushioned the company from the worst of the current crisis.”
Dawson said that the company’s performance would remain strong in the second half of the year, though he expected a slowdown in activity.
Didata financial results discussion
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