Reflecting the deep struggles of local tech firms, JSE-listed Etion reported the full year 2018 earnings today that plunged 108.2% versus last year.
Etion, South Africa’s diversified digital technology group, said headline earnings per share (HEPS) dropped 108.2% to 9.5 cents a share versus 6.11 cents in 2017 financial year.
HEPS is South Africa’s main profit gauge.
The diversified digital technology group also reported an 81.2% decline in EBITDA (Earnings before interest, tax, depreciation and amortisation) to R8.9 million in the year versus R47.3 million in the previous year.
The company’s revenue was also down 14.4% to R269.1 million in the year to end-September a lower order book in the mining and local defence sectors.
The shares of Etion, which is valued at R180 million on the JSE, were trading 3.13% higher at 0.33 cents by 9.45am on Wednesday. The stock has dropped 33% in the past 90 days.
Despite tough trading economic conditions, Etion is positive about the company turning around soon.
“We expect a significant recovery in the performance of the group in the next half of next year,” the company informed investors on Wednesday.
The company is banking on a number of initiatives in the market to deliver better results in the first half of 2019.
The company said the renewed impetus from the government to bring about regulatory certainty and improving safety levels in the mining sector, as well as the need to reduce costs and increase productivity, will translate into business for Etion Digitise, Create and Secure.
“We are finding expression in the mining industry through the addition of consulting in fatality prevention solutions through a global partner,” the company said.
“This will introduce subscription revenue to Etion Digitise.”
Furthermore, Etion is also targeting more revenue opportunities in cybersecurity and to provide digital railways solutions to the railway sector.
“We also see increasing demand for Internet of Things (IoT) solutions for low powered networks that operate smart cities, and smart mines and are driving demand for devices that operate on such networks,” Etion said.
“Prospects for the business look good in IoT initiatives being explored in South America and the Middle East where proof of concepts have been successfully implemented and pilot programmes are in place for Connected Car and Connected Electrical Metre Readings.”