EOH doing better despite revenue decline

EOH released its unaudited results for the six months to 31 January 2021 which showed an operating profit of R59 million – a big improvement over the R915 million loss in the prior period.

The most striking figure in the results is a revenue decline of 29% from R6.194 billion to R4.376 billion.

This decline, EOH CEO Stephen van Coller said, is a result of the strategic disposal of non-core assets and exit of under-performing businesses.

He said after this disposal EOH is a more sustainable business delivering better quality earnings.

“We have seen a significant reduction in one-off costs and are confident that our legacy issues are now under control,” said Van Coller.

While the local and global economy remains constrained, with a negative impact on EOH’s clients, there are green shoots.

“We have seen increased cloud uptake and spend on automation and application development in line with global trends,” the EOH CEO said.

The highlights of EOH’s results for the six months to 31 January 2021 are listed below.

Revenue of R4.376 billion.
Improved gross profit margin to 27.6% from 24.2% in the prior period.
Total core normalised EBITDA for the period was R363 million.
A normalised EBITDA margin improvement to 8.3% from 7.8% in the prior period.
Operating profit of R59 million generated compared to R915 million loss in the prior period.
Total headline loss per share improved by 83% with losses narrowing from 350 cents per share to 60 cents per share.
Cash balance of R440 million as at 31 March 2021.

Van Coller said their focus in the coming months will be on “deleveraging, enhancing margins, and remaining antifragile”.