Dimension Data subsidiary Datacraft Asia increased its operating profit after tax and minorities by 40.2% in the year to 30 June 2001, and is forecasting more growth in the coming year.
Chairman Des Althorp says the group maintained margins thanks to the rapidly increasing contribution from high-value service offerings. The Datacraft iCommerce division received more than $20 million in orders during the second half alone, he adds.
"Services now generate more than half the company`s profits and continue to be the fastest growing part of the business."
Revenue from services and software sales grew by 66.4%, while hardware sales rose by 25.8%.
Althorp says the company is undertaking sizable new projects in China, Korea, Thailand and Tonga.
The new contracts include a $20 million deal to set up an asynchronous digital subscriber line network for Hanaro Telecom in Korea, a $12 million deal to install a broadband network for China`s Anhui province, and a $10 million deal to set up a telecommunications infrastructure in Tonga.
All the countries in which Datacraft operates have maintained profitability, Althorp says. Japan was profitable but did not meet expectations as a result of local economic conditions.
"Margins in greater China have improved due to a higher proportion of services business compared to the previous year and the greatest margin contribution was achieved by the Asean (Association of Southeast Asian Nations) region, which has the highest proportion of services business.
"Going into the new year, we will obviously keep a close watch for deteriorating conditions in each of our markets and will act accordingly," Althorp says.
"Currently, Datacraft is still in a healthy position and today`s business uncertainties notwithstanding, we remain cautiously optimistic of another successful year."
Related stories:
DiData subsidiary makes $35m acquisition
Share