MiX Telematics achieves strong second quarter

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Stefan Joselowitz, CEO of MiX Telematics.
Stefan Joselowitz, CEO of MiX Telematics.

Fleet telematics solutions provider MiX Telematics boosted its subscriber revenue and profit in the second quarter and first half of fiscal 2018, which ended on 30 September.

The company, which provides fleet and mobile asset management solutions delivered as software-as-a-service, announced its results yesterday.

"MiX reported a very strong second quarter, highlighted by our ability to exceed expectations across all key operating metrics," says Stefan Joselowitz, CEO of MiX Telematics.

"Our 18% year-over-year subscription revenue growth on a constant currency basis was broad-based, driven by uptake from our premium fleet customers globally. Additionally, this is the fifth consecutive quarter of adjusted EBITDA [earnings before interest, tax, depreciation and amortisation] margin improvement. We are confident in our ability to maintain the momentum as we continue to execute our strategic initiatives and remain committed to achieving our longer-term adjusted EBITDA margin target of 30% plus," Joselowitz notes.

Subscription revenue was R349.3 million, an increase of 15.9% compared to R301.3 million for the second quarter of fiscal 2017. Subscription revenue increased more than 18% on a constant currency basis.

The company says subscription revenue benefited from an increase of over 55 000 subscribers, representing an increase in the subscriber base of 9.4% from September 2016 to September 2017. Subscription revenue also benefited from an expansion in the average revenue per user, it adds.

Total revenue was R411.2 million, an increase of 11.7% compared to R368.2 million for the second quarter of fiscal 2017. MiX points out that hardware and other revenue was R61.9 million, a decrease of 7.3% compared to R66.8 million for the second quarter of fiscal 2017.

Gross profit was R269.4 million ($19.9 million), compared to R253.1 million ($18.7 million) for the second quarter of fiscal 2017. Gross profit margin was 65.5%, compared to 68.8% for the second quarter of fiscal 2017.

The company's operating profit was R45.3 million, compared to R26.2 million for the second quarter of fiscal 2017. Operating margin was 11%, compared to 7.1% for the second quarter of fiscal 2017.

It explains the margin expansion was attributable primarily to the revenue growth leveraging fixed overhead, and to ongoing cost management initiatives. Operating expenses of R224.1 million have declined by R2.8 million, or 1.3%, since the second quarter of fiscal 2017.

Profit for the period was R24.2 million, compared to R23.2 million in the second quarter of fiscal 2017. Profit for the period includes a net foreign exchange gain of R3.2 million before tax. During the second quarter of fiscal 2017, profit for the period included a net foreign exchange loss of R8.4 million, primarily relating to US dollar cash reserves, which are sensitive to rand-dollar exchange rate movements.

According to the company, earnings per diluted ordinary share were four South African cents, consistent with the second quarter of fiscal 2017.

For the second quarter of fiscal 2018, the calculation was based on diluted weighted average ordinary shares in issue of 566 million compared to 633.4 million diluted weighted average ordinary shares in issue during the second quarter of fiscal 2017.

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