MiX weighs reporting results in dollars

JSE-listed MiX Telematics may report its numbers in US dollars in the future, management says, as the group reported that the stronger rand could weigh on its fourth-quarter results.

If maintained at current levels, the rand’s strong gains since the ANC’s elective conference in December “will be a headwind on the upcoming quarter’s performance”, finance chief Paul Dell said.

MiX CEO Stefan Joselowitz, who lives in the US, said while he preferred a stronger rand, “the day may very well come when we report our business in US dollars”.

The strengthening rand would offset some of the expected revenue gains in the fourth quarter in rand terms, while adding to revenue growth in dollar terms, he said.

However, the effect on profits was negligible “since we have foreign currency costs in our operations that come down in rand terms with a stronger currency,” said Joselowitz.

“Ultimately I believe our business valuation will be driven by our performance both at the top and bottom line measured in US dollars rather than South African rands.

“We have no control over exchange rates, which are cyclical, and there are pros and cons whichever way you look at it, but on balance, I love a strong rand the way Warren Buffett loves cheap hamburgers.” Joselowitz said in 2017 that MiX was in no rush to have a sole listing in the US, where it has depositary shares listed on the New York Stock Exchange.

Meanwhile, he said on Thursday MiX was “firing on all cylinders”, having reported its best quarter.

In the third quarter to endDecember, MiX’s subscription revenue rose 21% year on year on a constant currency basis to R376m. The subscriber base grew 10% while adjusted earnings before interest, taxes, depreciation and amortisation rose 30% to R115m.

Joselowitz said the group had secured “a few sizeable customer wins” in Mexico and Brazil, including a bus fleet of more than 800 vehicles in the Brazilian city of Salvador. Total revenues for the full year were expected to be about R1.7bn.

“Given the strong pipeline of committed orders and sales opportunities globally, we remain confident in our ability to maintain the momentum,” Joselowitz said.