Didata rides high in downturn

Zweli Mokgata

Zweli Mokgata

International IT giant Dimension Data (Didata) 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 8,1percent to $1,95billion (about R16,5billion) for the six months ended in March.

Among those present were Andile Ngcaba, whose empowerment vehicle, Ngcaba Holdings owns 12,71percent of Didata SA.

The JSE-listed company's share price had also recovered from a low of just over R4 per share in November 2008 to its current levels of around R6,30.

The group managed to boost its operating profit by 37,4percent during the six month period courtesy of various cost-cutting exercises.

Said Dawson: "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 United States 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 American operation by nine percent.

In Asia the group also laid off four percent of its employees in response to a two percent dip in revenue in that region.

The Middle East and Africa, which is seen as still playing catch up with the rest of the world in terms of technology infrastructure, made the strongest gains with a 30percent increase in revenue.

This saw operating profits rise by 19percent from last year.

Dawson said the group's product services business fell by three percent 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."

Dawson said the company's performance would remain strong in the second half of the year, though he expected a slowdown in activity.