Didata sees lower H1 gross margin

South African technology group Didata said on Thursday that it expected a fall in its overall gross margin in the first half of...

South African technology group Didata said on Thursday that it expected a fall in its overall gross margin in the first half of its financial year and that trading conditions remained difficult.

"While there is continued evidence that the pressures on technology margins have stabilised, the lower volumes in Asia and the U.S. will result in a reduction of the group's overall gross margin for the first half to around 19 percent," it said in a trading update.

The group had previously expected gross margins for full-year 2003 to be 20.7 percent, in line with the second half of 2002.

The conditions in which the group operates "remain difficult, and visibility remains limited", it added.

The update came after its loss-making Datacraft Asia Ltd, Asia's largest computer network systems integrator, said on Thursday its 2003 outlook remained challenging and it expected to set aside more money for restructuring charges.

It said in a statement it was projecting quarterly revenue of US$80 million to US$85 million.

Didata also said its U.S. region was expected to post an interim loss.

"Dimension Data's U.S.A. region, which had been downsized in the previous year to a month-on-month break-even position, is now expected to post a loss for the first half," it said.

"This region represents a less mature business model than the rest of the Group, and the unanticipated sharp decline in infrastructure volumes and related services, reflecting the performance of some of our key suppliers (notably Cisco in that region), has led to this loss," it added.

 

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