Leading IT solutions and services provider arivia.kom has announced its financial results for its fourth year of being in business.
The group`s revenue declined by 7.8%, from R1.728 billion in 2004, to R1.594 billion, which resulted in a lower absolute EBITDA of R200.4 million and EBIT of R84.6 million. However, in relative terms, the EBITDA margin increased to 12.6% from 12.4%, and the net profit for the year amounted to R63.5 million, up from R55.6 million. Profit before tax has remained almost unchanged from the previous financial year at R90.5 million.
Arivia.kom Chief Executive Officer Zeth Malele is satisfied that the results indicate the group`s commitment to investing strategically in its resources and delivery capabilities. According to Malele, arivia.kom has had to correct certain historical discrepancies pre-dating the group`s formation in 2001, such as the buy-out of certain employee-related benefits - leave, post-retirement medical aid and gratuities.
In addition, the group elected to invest in the realignment of its operational models to changing market requirements. It has established a consulting enterprise, in line with its existing range of service offerings and its business strategy, which has resulted in noticeable benefits.
"Through these innovations and strategic repositioning, we are consolidating our position as a market leader. Arivia.kom has achieved the distinction of having the second largest market share of IT professional services in SA, as indicated by research company BMI-TechKnowledge," says Malele.
[VIDEO]While SA`s macro-economic performance presented overall growth in 2004, arivia.kom was faced with challenges specific to the IT sector. These included reduced IT expenditure from its traditional client base, the ongoing trend of the commoditisation of infrastructure-type service offerings, and in countries outside SA, longer than anticipated lead times in finalising agreements.
Also, funding challenges presented themselves in the particular countries in which arivia.kom is establishing itself, such as Nigeria.
In the 2004-2005 financial year, the group secured new business with clients in both the private and public sectors, in pursuit of its goal of diversifying its revenue base from its traditional clients. These include the South African Post Office, UUNet, Sentech, Engen, Minolco, Leverponds, De Beers Marine and the Departments of Home Affairs and Correctional Services, to name but a few of the agreements secured in SA.
In terms of black economic empowerment (BEE), an increasingly critical factor in the IT market, arivia.kom has continued to aggressively drive its group-wide BEE initiatives. Arivia.kom`s staff complement at the end of the financial year consisted of 49% black and 33% female permanent employees, and the group has spent approximately R66.7 million of assignable business (74.4%) on BEE procurement.
Malele emphasises that though the group has encountered considerable challenges in its growth strategy, it remains wholeheartedly committed to its vision and strategic intent to become the dominant ICT solutions provider on the African continent. "Our focus in the 2005-2006 financial year will be on the further execution of the strategic imperatives set at the launch of our business, and which have, to date, worked very well for us, regardless of the challenges we have had to overcome."
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