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Johannesburg - The share price of Sandton headquartered technology company Datatec [JSE:DTC] slid more than 17% in trade on Wednesday following a profit warning.
According to INET BFA data, Datatec’s share price on the Johannesburg Stock Exchange (JSE) fell from an opening of R73.43 to R60.51 by 13:15.
A Datatec trading statement on Wednesday morning sparked the selloff as the company warned shareholders that its total foreign exchange losses in the first half of its current financial year amounted to $10.6m.
In preparing for its interim results for the six months ended August 31 2015, the company warned that earnings per share and headline earnings per share is expected to be 12 US cents, which is 25% lower than the 16 US cents reported for the same period last year.
The company also reported that underlying earnings per share for the first half of this financial year will be approximately 15 US cents, which is 18% lower than the 18.2 US cents reported in the same period last year.
In July, Datatec released a trading statement saying that it had delivered good revenue growth in North America but that profitability would be impacted by restructuring at Westcon EMEA and reorganisation at Logicalis.
Westcon Group distributes network infrastructure, data centre and security solutions while Logicalis Group is a provider of global IT solutions and managed services. Both companies fall under Datatec.
Furthermore, changes in Angola have also hurt Datatec.
“In particular, the imposition of capital controls at the end of 2014 in Angola and the devaluation of the Angolan Kwanza resulted in a foreign exchange loss of $8.9 million in H1 FY16 at Westcon,” said the company.
“Management has instituted a series of actions to control the exposure and reduce further losses,” the company added.
Datatec told Fin24 in July that it has annualised revenues of over $6bn and employs more than 8 000 employees in offices in over 60 countries.
