Diversified digital technology group Etion, formerly known as Ansys, on Wednesday posted significant double-digit declines in earnings and revenue for the financial year ended March 31, owing to challenging market conditions.
Headline earnings per share (HEPS) plunged 50% to 7.29c, while earnings before interest, taxes, depreciation and amortisation (Ebitda) fell by 46% to R60.7-million.
Revenue for the financial year decreased by 29% to R572.6-million.
However, gross margin improved, from 26.3% in 2017, to 28.3% during the year under review, owing to the implementation of an extended product mix and the introduction of various efficiencies.
“The 2018 results demonstrate the group’s resilience in the face of difficult macroeconomic conditions, which saw several large clients either postpone or cancel orders during the reporting period,” said Etion CEO Teddy Daka.
He added that the decrease in the key indicators was also partly owing to the fact that the 2017 financial year was an exceptional year and that the business is now experiencing an anticipated correction.
“The revenue performance continues to reflect a positive trend of a compounded annual growth rate (CAGR) of 31% over three years,” he added.
Earnings delivered a three-year CAGR of 18%, while Ebitda delivered “an encouraging trend” with a CAGR of 46% over three years.
Amid the group’s restructure and rebranding from Ansys to Etion, Daka expected a more positive outlook for the 2019 financial year, despite a slower economic recovery.
“Under the new brand name, the group is strongly positioned to take advantage of new opportunities as the digital revolution gains momentum both locally and internationally.
“Our new positioning and unified integrated brand will drive performance as the growing penetration of digital technologies is inevitable,” he added.
Etion plans to focus on leveraging its integrated capability to better provide solutions to existing segments, as well as on exploring opportunities in new segments and sectors.
“At an operational level, we will continue to optimise margins, manage expenditure, control cash flow and improve reserves. Continued investment in plant, equipment and human capital will also remain important focus areas,” Daka concluded.