The African region remains the most profitable for London- and Johannesburg-listed Dimension Data, which now claims operations with revenues in excess of $200 million on three continents, and profits from all, bar South America.
Executive chairman Jeremy Ord says good organic growth was achieved across the board, despite "evidence of a slowing global economy".
The Africa operation, consisting nearly exclusively of SA, contributed 35% or $44 million to the $122 million operating profit before goodwill amortisation the group announced today, for the six months ended March. That is nearly equal to the combined operating profits of the US, UK and continental European businesses.
But the profit from Africa was nearly stagnant compared to the same period last year, despite an 18% growth in turnover, which equates to a 42% currency adjusted growth. In contrast, operating profit from continental Europe grew by more than nine times on the acquisition of the Comparex business there, which was included for only one month in the March 2000 results.
However, Africa is expected to perform well in the second half of the year. "A number of contracts that were not concluded in the first half of the year are expected to materialise in the second half," the company says in its regional overview of the continent.
DiData says a strengthening dollar impacted its results, but that the majority of its businesses showed strong growth on a currency adjusted and organic basis.
"Organic turnover growth in constant currency terms was 34%, reflecting the increase in demand for the group`s offerings from new and existing clients, and good market share gains in the Network Services division in most geographies," the company says in its results statement.
Network services saw a turnover of more than $1 billion and an operating profit of $117 million. The Investment holding and management division and local Protocol Venture Capital businesses, classified as "other Africa" in the company`s geographic breakdown, were the only divisions to report losses, collectively bleeding more than $9 million.
The company is confident of its prospects for the full year, and says it will address the weak link in its organisation, its i-Commerce business, which showed an operating profit 20% less than in the same period last year.
"Steps have been taken to counteract the negative impact of profitability of under-utilised capacity in the i-Commerce business," the company says. "This, combined with a close focus on costs, is expected to reverse the trend in declining margins seen across the i-Commerce businesses in the first half of the year."
At midday today, DiData`s share price was at R35.45, after gaining 55c, or 1.58%.
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