Datatec, a Johannesburg-based multinational technology group led by South African businessman Jens Montanana, reported a double-digit decline in earnings at the end of the first half of its 2023 fiscal year due to a difficult operating environment characterized by a semiconductor shortage and supply chain constraints.
According to figures contained in the group’s recently published financial statement, the multinational tech group’s headline earnings, the primary profit measure in South Africa, fell by 25.4 percent from $0.063 per share in the first half of 2022 to $0.047 per share in the first half of 2023.
The double-digit drop in Datatec earnings came despite an eight-percent increase in revenue from $2.26 billion to $2.45 billion due to strong demand for network infrastructure and remote access solutions from its best-performing subsidiary, Westcon International.
The decline in earnings can be attributed to the disruption to global supply chains that impacted Datatec’s businesses, with its operations in Latin America being the most impacted.
The group did note that demand for cloud-based networking, cybersecurity, and related products and solutions remained strong and that the overall mix of software and services continued to expand. The move is expected to result in higher earnings in the second half of the group’s current fiscal year.
While commenting on the recently published financial statement, Montanana, Datatec’s CEO, said the group’s operations are well-positioned to take full advantage of the robustness in networking and cybersecurity demand around the world, but that the persistent strength of the U.S. dollar remains a headwind to growth.
Datatec is a South African provider of ICT solutions and services, specializing in software and cloud computing solutions such as Infrastructure as a Service (IaaS) and Software as a Service (SaaS).
The tech group has expanded to more than 50 countries in North America, Latin America, Europe, Africa, the Middle East, and Asia-Pacific under Montanana, who established the group in 1986 and owns a significant 11.98-percent stake in the Johannesburg-based company.
Despite the recent decline in Datatec’s headline earnings, Montanana is set to receive a special dividend of £16.18 million ($17.91 million) from the group’s initial consideration from the sale of Analysys Mason to UK fund manager Bridgepoint Development Capital (BDC).