Johannesburg - Investors warmed to Dimension Data Holdings' (Didata's) half-year operating and financial performance which showed the R10bn specialist IT firm resiliant to volatile currency markets, and a decrease in client expenditure.
The company on Wednesday reported a 10.2% decrease in revenue from $2.1bn to $1.9bn (about R17.6bn to R15.9) for the six months to end-March 2009. However, operating profit increased 2.8% from $85m to $87.4m (about R713.1m to R733.2) and the operating margin from 3.9% to 4.5%. Earnings per share also increased, rising from US3.7c/share to US3.9c/share.
The stock gained 5.5% in early morning trade and was last at R6.33 per share. Peer group company, Datatec, was down marginally.
"The year-on-year appreciation of the US dollar against most of our trading currencies has impacted our statutory reported results in US dollars, with revenues falling by 10.2%," Didata CEO Brett Dawson said. However, revenue increased by 8.1% once adjusted for the impact of currency movement.
"Excellent execution in our services business drove our overall revenue and profitability growth in the period," said Dawson. The group's revenue for its services business increased 21.1% and were especially driven by growth of 25.2% in managed services.
Although service revenue has improved, growth in product revenue remained muted.
"This reflects economic realities and a decrease in client capital expenditure," said Dawson.
He remained cautious about the company's prospects for the rest of year, saying it is too early to call an upturn in the market. "However, we continue to see opportunities throughout our solutions and services portfolio and believe the medium term opportunities are robust," Dawson said.
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