Jasco seeks green pastures with energy hub in Dubai
JASCO Electronics is closer to opening a hub in Dubai, where it plans to focus on the renewable energy industry in the United Arab Emirates (UAE).
Jasco is diversifying its revenue streams in the hope that it will reduce its reliance on SA.
CEO Pete da Silva said the UAE had made a financial commitment to develop renewable energy. “We have registered a company and are also engaging with the relevant authorities,” said Da Silva.
He said the company would take the same approach as in Kenya, where it established a presence through subsidiary NewTelco to cater for the East African market.
The Kenyan business is delivering a strong performance.
“Part of our strategy is to diversify to new territories to mitigate volatile rand exposure and allow for improved growth and profitability,” he said.
Jasco reported a 4.2% decrease in full-year revenue to R1.1bn on lower volume growth, particularly in the second half. Operating profit was R41.7m compared with an operating loss of R72.5m in 2015 following oneoff impairments and adjustments of R101.1m in 2015.
Jasco had a strong first half and a much weaker second half on the sharp downturn in the domestic economy in 2016, with the volatile exchange rate affecting it negatively.
“The lack of growth in the South African market was disappointing,” said Da Silva.
Revenue from the enterprise business, which provides end-toend solutions and services such as technology infrastructure, was down 16.4% to R318m, largely due to tough trading conditions in SA and the business unit prioritising profitable projects. The unit was still “not achieving the targeted profitability levels due to the continued complexity in its restructuring and tough market conditions”.
The carriers unit, which focuses on designing and planning network infrastructure for telecommunications companies, reported flat revenue of R414.2m. Operating profit was down 1% to R47.8m due to exchange rate volatility.
Da Silva said that during the year telecoms operators continued focusing on reducing costs and this resulted in constrained capital expenditure.
However, the unit managed to maintain new orders and revenue levels by deploying network infrastructure for the fixed-line operators and also for mobile companies to cater for demand for data services.
Among other units, intelligent technologies and electrical manufacturers reported improved margins.
Jasco said it would evaluate bolt-on acquisitions to prop up some of its businesses. The group also aimed to reduce financial gearing to less than 50% in 2017, it said.