Revenue, profits fall at Di Data

Revenue, profits fall at Di Data

Dimension Data has reported falling revenues and profits for its worldwide operations, with its Australian operations also falling victim to a slumped market and falling margins.

The global services company reported a US$30.1 million (A$53.5 million) operating profit for the year to September 30, falling significantly from the US$163.8 million earned the previous financial year.

The profits were earned on turnover of US$2.18 billion, a slight fall from the US$2.46 billion earned the previous year.

Dimension Data Australia, which includes both its network services division and distributor Express Data, reported an A$18.1 million operating profit, down from A$29.5 million the previous year. Revenues fell from A$720 million in 2001 down to just under A$650 million.

"Depressed demand resulted in revenues in the Australian business declining by 10 per cent on 2001," read a statement released by the Dimension Data Group. "However, following a sharp decline in the first half of the year, revenues rebounded strongly in the second half, increasing sequentially by 33 per cent."

The report stated that distributor Express Data had "gained market share in major product lines", and that the network infrastructure and integration business "maintained its market leadership position". Express Data's revenue fell slightly from A$386.9 million in 2001 to $321.3 million, while the network infrastructure and integration business reported improving revenues (A$290.9 million compared to $250.7 million in 2001).

To cope with falling margins, the Australian operations have engaged in a cost-cutting exercise over the past 12 months that has seen its headcount reduced by 18 per cent, unprofitable businesses discarded and lease overheads reduced.

"Stricter margin governance processes, improvement of services margins through better utilisation, and recovery rates and the outsourcing of logistics to Express Data are key objectives aimed at improving profitability in the new financial year," the report said.

For more on Dimension Data, see next week's issue of ARN.

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