MICROmega's earnings hammered

Although it grew revenue 2% in the half year to June, headline earnings per share halved, says investment holding company MICROmega.

The company, which has interests in several sectors including IT, says earnings per share were 70% down, to 11.52c, while headline earnings per share dropped 52%, to 11.34c. Revenue grew 2%, to R394 million.

Its IT division was the star performer, growing profit from R2 million to R12.6 million, outstripping growth in the financial services division, while all the other units dropped in profitability.

MICROmega's IT division houses entities such as Intermap, an enterprise software development company serving a range of commerce, industry and government clients. Its Revenue Management Solutions is a meter-reading company, which provides revenue management solutions to local government and other water and electricity utilities.

MICROmega Technologies is a specialist distributor of business network optimisation solutions, including hardware technologies, software-based analytical and management systems.

MICROmega declares it is “satisfied” with the company's performance, despite the decline in earnings of R24 million year-on-year, which can be attributed to two principle causes.

There was a reduction in earnings of R21 million after it closed Kolbenco, in December 2008, which led to the necessity to raise further provisions in the half year to recognise the unit's impairment.

In addition, the rand's strength against the dollar led to a R4 million loss on dollar-based receivables.

“Giving consideration to the aforementioned, and the extended economic slowdown that we have experienced in the automotive sector, we are satisfied that our diverse investment portfolio has shielded us against excessive erosion in the profitability of our combined businesses,” the company notes.

It adds it has retained revenue and is growing its IT division, which is expected to continue through the rest of the year.

Related story:
MICROmega's earnings fall