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Ansys revenue drops 23%

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 29 Nov 2017
Ansys group CEO Teddy Daka.
Ansys group CEO Teddy Daka.

Diversified digital technology group Ansys says revenue has taken a knock of 23.1% from R408.6 million to R314.2 million.

This morning, the AltX-listed company released its interim results for the six-month period ending 30 September.

Ansys group CEO Teddy Daka explained that constrained trading conditions during the current interim period resulted in a reduction in revenue.

As a result, EBITDA slowed by 17.3% from R57.2million to R47.3 million, he noted.

The gross profit margin, nevertheless, increased from 24.9% to 31.7%, attributable to improved supply chain measures.

Profit after tax decreased by 19.7% to R28 million R34.9 million. A reduction in foreign exchange gains, as well as a 1.9% increase in operating costs related to investments, also contributed to a decrease in profit after tax, says Ansys.

Headline earnings slowed by 19.3% to R28.2 million from R34.9 million in the previous interim period, translating into a parallel decrease of 19.3% in headline earnings per share from 7.57 cents to 6.11 cents.

In contrast, net asset value per share increased by 25.8% from 51.2 cents per share to 64.4 cents per share, while tangible net asset value per share increased by 51.3% from 25.6 cents per share to 38.8 cents per share. These increases were due to continued operating profits generated by the group during the reporting period, the company says.

Daka said the interim results reflect muted market conditions, especially in sectors such as rail. He pointed out that Ansys is, however, actively repositioning for future growth, which is expected to arise from the digitisation of operations in all of the sectors in which the group operates.

"We have made considerable investments in human capital and new IP, which will contribute towards this. While these investments have had a negative impact on profits in the short term, they support the group's strategic objective of creating a more sustainable business capable of exploiting additional market segments and the opportunities presented by digitation," he said.

Over the course of the past year, he explained, Ansys has repositioned itself as a digital technology provider, leveraging existing technologies, capabilities and processes in order to offer solutions that go beyond its existing areas of focus.

By leveraging its own IP and that of its partners, the group develops, produces, distributes and integrates technology solutions to enhance customer and consumer safety and productivity, connectivity, cyber security and digital defence.

At segment level, the telecommunications segment experienced an upsurge throughout the course of the 2017 financial year, with high growth driven by the roll-out of fibre-to-the-home (FTTH), the company says.

However, it notes that a subsequent slowdown by some of the network operators in rolling out FTTH impacted negatively on revenue in this segment during the current interim period, resulting in a 6% decrease in revenue from R182 million in the previous interim period to R171.7 million in the current period. Segment profit decreased by 1.8% from R29.3 million to R28.8 million.

In the defence and cyber security segment, exports to international markets account for 67% of revenue.

"With large component orders not reaching the same levels as in the previous interim period, revenue decreased by 49.4% from R115.2 million to R58.3 million," Daka said.

Segment profit consequently went down by 38.2%, although margins showed an improvement to 14.5% (R8.4 million) if compared to 11.8% (R13.6 million) in the previous interim period.

Similarly, local expenditure in defence remained subdued throughout the reporting period.

Finally, revenue in the mining and industrial segment increased marginally by 5.2% from R45.2 million to R47.5 million, despite the country's mining and industrial sectors both being under pressure. This was due mainly to the effect of more stringent adherence to high safety standards and the move towards the digitisation of operations.

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