Mustek revenue takes a knock

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 06 Mar 2024
Mustek's earnings per share were down 59% to 91.02c.
Mustek's earnings per share were down 59% to 91.02c.

PC distributor Mustek has reported a 13% revenue decline in the six months to December 2023.

The JSE-listed company announced its interim results today, posting revenue of R4.3 billion. In the corresponding period last year, the distributor’s revenue stood at R4.9 billion.

Mustek is one of the largest assemblers and distributors of PCs and complementary ICT products in South Africa.

The company also reports that earnings per share were down 59% to 91.02c (six months to December 2022: 219.35c).

Headline earnings per share were also down 59% to 91.3c (six months to December 2022: 221.74c).

“The six months ended 31 December 2023 were marked by a decline in the group’s performance, reflecting the adverse impact of the prevailing local and global economic challenges, such as high inflation, high interest rates and low consumer and investor confidence,” says the company.

“The group faced a weaker demand for its green energy products, which had been a key driver of revenue growth in the comparative period.”

It explains that revenue decreased by 13% to R4.27 billion mainly due to lower sales volumes of green energy products, which declined by approximately 55% year-on-year.

Mustek and Rectron, the company's two largest segments, saw their revenue decline by 15% and 9.9%, respectively. The group’s IT training company, Mecer Inter-Ed, also experienced a slight decline in revenue to R46.2 million (31 December 2022: R48.8 million) due to tougher market conditions, says the company.

The gross profit margin decreased to 13.4% (2023: 14.1%), due to competitive forces in green energy products, product composition and the effort to lower stock levels, it says.

According to Mustek, gross profit on green energy products reduced by approximately R100 million year-on-year.

Despite the fluctuations in foreign exchange rates during the period, it points out that the group was able to realise a forex profit of R10.6 million versus a forex loss of R62.9 million in the comparative period.