Dimension Data Australia reports $16.5M loss for 2017

Dimension Data Australia reports $16.5M loss for 2017

Off the back of $1.2 billion in revenues for the period

Dimension Data Australia has reported a $16.5 million after tax loss for the financial year ending 30 September 2017, a far cry from the $105.9 million loss it booked in 2016.

The local operations of Dimension Data -- part of the long distance and international communications business segment of the Nippon Telegraph and Telephone (NTT) group, which acquired the company in 2010 for US$3.2 billion -- reported revenues of $1.2 billion during the year ending 2017.

The multimillion-dollar loss from continuing operations after income tax meant that, once again, the company’s local operations received a tax benefit in Australia rather than a tax bill. In 2017, the tax benefit amounted to $5.3 million. The year prior, the company received a tax benefit of $11.7 million.

The losses incurred by Dimension Data Australia for the financial year ending 2016 were heavily influenced by the $73 million impairment charge -- or write-down -- it booked against Australian consulting and technology firm, Oakton, which it acquired in late 2014 for a total consideration of $171 million.

Dimension Data Australia received a capital injection of about $175.9 million from its parent company for the acquisition, along with the continued investment in the development, sales and marketing of Dimension Data’s cloud services offerings.

According to financial documents lodged with the Australian corporate regulator, on the final day of its 2017 financial year -- 30 September -- Dimension Data Australia sold its Dimension Data Cloud Solutions Australia to Dimension Data Group Services Australia, a related entity within the same tax group incorporated under NTT.

Just weeks earlier, on 10 November 2017, NTT Communications and Dimension Data jointly announced a move to combine their respective cloud infrastructure-as-a-service (IaaS) operations into one business under the management of NTT Communications.

According to terms of the partnership, both companies will retain existing strategic partnerships under the new structure.

“Working together to enhance our cloud and value added services, combined with our industry leading networking, global data centre assets and security capabilities, both Dimension Data and NTT Communications will offer clients a more compelling hybrid IT value proposition,” NTT Holdings head of global business Tsunehisa Okuno said at the time.

Dimension Data said it would continue to offer cloud IaaS services, which will be sourced from NTT Communications as a wholesale provider as well as being responsible for service development and operation.

As well as consistent computing environments, programmable interfaces and automated delivery models, the partnership also offers consumption-based billing model for private cloud deployments.

“Combining our cloud IaaS assets provides enterprises on their hybrid IT journey with a unique combination of services and expertise, on a global basis,” Dimension Data Group CEO Jason Goodall said at the time.

The 2017 financial year also saw Sydney-based managed services provider, CustomTec, acquire Dimension Data’s mid-market hosted desktop service business in Australia, in its first-ever acquisition.

The acquisition was completed on 30 September 2017 and operations started being transferred from 1 October last year with the majority of the personnel and all data centre infrastructure, previously owned by Dimension Data, absorbed by the MSP.

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