DURBAN - Jasco Electronics said this week it expected the economic outlook for financial year 2021 to remain very challenging after its losses widened by 280 percent for the year to end June.
The group reported that its losses widened to R110.9 million during the period, up from R29.1m reported a year earlier.
The group said it faced tough trading conditions in the first half to December, particularly in the ICT-Carriers business due to a sharp reduction in spend by a major telecommunications operator.
“These challenges continued into the start of the second half of the year before disaster struck, with the announcement of an immediate national lockdown in response to the Covid-19 pandemic. The resultant impact in the fourth quarter was a devastating revenue impact of approximately R163m and approximately R59m impact on operating profit,” the group said.
However, the group said its management was focusing on executing its strategic goals in the next 12 months by stabilising the balance sheet and disposing of non-core assets as well as reducing its debt.
The group also intended to improve earnings in the next 12 months by addressing the head office costs and underperforming business units to meet profitability targets, accelerate growth through investment in key growth markets and launch new smart solution offerings of open access networks, internet-of-things and cloud workforce management.
Its revenue fell by 17 percent to R939.2m, due to the Covid-19 related lockdown in the fourth quarter of the financial year.
The group said revenue of R11.5m recognised in the first half by Datavoice in ICT-Enterprise had to be reversed during the second half due to a legal challenge between one of their customers and their customer in Poland.
“Although the contract between Jasco and its customer remains in effect, management decided to follow a conservative approach and reverse the revenue recognised during the year. Accordingly, the payments received from the customer are accounted for as advanced payments,” the group said.
The ICT-Carriers business was the hardest hit and reported a 48.1 percent decline in revenue.
The group’s other reporting segments include ICT-Enterprise, Security and Fire, Power Renewables and Electrical Manufacturers.
The group also reported that its loss a share widened to 49.4 cents a share compared to last year’s loss of 12.9c while headline loss rose to 44.5c, up from last year’s 10.7c.
Its operating loss before net interest was R60.3m from an operating profit of R11.3m reported last year, due to the drop in revenue, once-off restructure costs and the impairment of goodwill.
Its goodwill decreased from R82.1m last year to R71.8m due to the impairment of R10.3m of goodwill related to RAMM Technologies.
The group did not declare a dividend during the year.
The share price closed 11.76 percent at 15 cents on Tuesday.
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