Didata predicts profit rise as services grow

Cisco Gold partner says "strong" Q3 performance bodes well for full-year results

Didata claims surge in services will bolster its bottom line

Giant networking VAR Dimension Data (Didata) claims it is on course to post higher profits in 2009 as it continues to port more of its business from product resale to services.

In an interim management statement, the Cisco Gold partner said it had extended its “strong financial performance” in its third quarter to 30 June. Although reported revenues fell by 12 per cent year on year, gross margins improved over the period due mainly to the change in revenue mix in favour of services.

In constant currency, services revenues powered up 12 per cent while product revenues fell 14 per cent.

As a result, for its full-year 2009 Johannesburg-based Didata said it expects to beat the $182.2m (£110m) operating profit it banked in 2008, at least on a constant currency basis.

“In the medium term, we continue to see opportunities throughout our Solutions and Services portfolio, and remain optimistic about the prospects for the group,” the firm said in a statement.

“We remain committed to investing in our execution capabilities and to enhancing our competitive position to capture opportunities in the markets within which the group operates.”

From a geographic standpoint, EMEA and Australian revenue and operating profit increased in constant currencies, while the Americas suffered a revenue and profit decline. Asia’s profitability improved despite a dip in product revenues, Didata said.