- Company reports first-half foreign exchange losses of $10.6m
- Shares decline as much as 22%; cuts year-to-date gains to 10%
Datatec Ltd., a South African computer-technology company, fell the most in more than 14 years after reporting a 25 percent fall in first-half earnings per share due to a weaker Angolan kwanza and rand against the U.S. dollar.
The company, which installs Cisco Systems Inc. products and has operations in the U.S. and U.K, fell as much as 22 percent, the most since March 2001, and traded 17 percent lower at 61.20 rand as of 3:30 p.m. in Johannesburg. That pared the year’s gains to 10 percent, valuing the company at 12.8 billion rand.
The foreign-exchange loss for the six months through August was $10.6 million, Johannesburg-based Datatec said in a statement on Wednesday. The rand has weakened 17 percent against the dollar this year, the third-worst performer among 16 major currencies monitored by Bloomberg. The kwanza is 24 percent lower, the third-worst performer in Africa.
“South Africa’s weak currency is working against” Datatec, Keith McLachlan, fund manager at Alphawealth Asset Management said by phone from Johannesburg. “Their trading update definitely didn’t meet expectations.”