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Dimension Data hit by Asian loss

Bad debts, low demand

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ComputerWire: IT Industry Intelligence

Network integrator Dimension Data Holdings Plc said yesterday that there is little demand for new contracts, and revealed that its Asian operation fell into the red during the first half of its fiscal year.

In the six months to March 31, the Johannesburg, South Africa-based company was hit with exceptional charges and goodwill of $722.8m, which gave it an overall net loss of $696.2m, compared to a net loss of $1.6bn in the year-ago period. Revenue fell by 10.8% to $1.1bn.

Sales from its Asian business, Datacraft Asia, fell by 28% to $211m, and the company also said that it will set aside between $19m to $23m to allow for bad debts with certain Chinese clients. Datacraft took a $21.7m charge in the half-year relating to a reduction in headcount, which made it loss-making at a net level - its first since floating on the stock market in 1995.

Jeremy Ord, Dimension Data chairman, said: "There is little demand for new projects so buying cycles are long and pricing pressure intense." He said he expects the second half of Didata's fiscal year to improve on the first half, but admitted that the company's visibility remained "cloudy".

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