AI boom drives jump in operating profit for Datatec

Multinational technology group Datatec has reported a jump in operating profit for the year to end-February 2025, although at the same time revenue fell.

The JSE-listed company posted a 37% increase in operating profits to over R1.2 billion ($69-million), while revenue was down by nearly 9% to just under R65 billion ($3.6-billion).

Headline earnings per share (HEPS) were 25.5 US cents per share, compared to 14.2c for the previous period.

Datatec declared an annual dividend of R2 per share, an increase of 54%.

Company founder and CEO Jens Montanana explains that the drop in revenue is mainly attributable to a mix change and more software and services being net revenue accounted.

"The revenue line is a little bit misleading...  The shift to net accounting means we don't recognise the sales value of the software; we recognise the gross profit that we make."

Jens Montanana, CEO - Datatec

"When you make that adjustment it has the impact of reducing your revenues and improving your margins, but that's just optics. You really have to follow the gross profit dollars we bring in and they rose 9-10% in that period, which resulted in a big jump in our operating profit."

Jens Montanana, CEO - Datatec

Montanana highlights the positive trajectory for the industry as a whole, thanks in part to the rise of artificial intelligence (AI).

"This is starting to impact what companies and enterprises have to prepare for - think of your whole IT real estate needing to basically catch up with what's going to be required."

Jens Montanana, CEO - Datatec

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