Etion hurt by impairments and retrenchment costs
DURBAN – Technology company Etion on Thursday reported that its losses had widened by 1 223 percent to R36.13 million in he year to end March, hurt by impairments and retrenchments costs of R64.2m.
Last year Etion reported a loss of R2.73m.
The past financial year had tested its resilience in extremely challenging operating conditions, with significant once-off operating costs being incurred following the strategic reorganisation of the Safety and Productivity Solutions and Digital Network Solutions businesses, Etion said.
Its revenue declined by 4 percent to R572.89m while earnings before interest tax, depreciation and amortisation fell by 132 percent to a loss of R9.62m compared to earnings of R29.86m.
Etion reported a basic loss of 6.40 cents a share, up by 1 108 percent and a headline loss of 0.87c, up by 64 percent.
However, Etion said it had made encouraging progress in its international expansion strategy and grew its cybersecurity offering through the acquisition of LAWTrust, now incorporated into Etion Secure.
“We benefited from the strong financial performance of LAWTrust while Etion Create remained cash-generative and continued to invest in new IP and international expansion for future growth, despite lengthy delays in major project awards,” the group said.
But its two other segments, Etion Digitise and Etion Connect were heavily impacted by sustained economic weakness in South Africa before the Covid-19 crisis in March.
This led to Etion Connect and Etion Digitise reporting losses of R32.55m and R36.41m respectively, and Etion Secure and Etion Create reporting profits of R38.07m and R7.76m, respectively.
The company grew its cash generation by 120 percent to R82.61m, compared to R37.48m a year earlier.
Etion said that while the challenges ahead were significant, the group had established the foundation for sustainable growth by preparing its businesses for leaner, less predictable times, while ensuring they capitalise on growth opportunities, particularly in international markets.