DMX Tech suffers 60.4% fall in profits

Delays are the culprit.

Integrated network infrastructure and digital media solutions provider DMX Technologies reported declines in revenue and profit on the back of ICT project delays in politically uncertain Indonesia and changing IT trends in China and Korea.

In a media release, DMX Tech announced that its revenue fell 17.5% year on year to US$77.4 million while net profit correspondingly fell 60.4% year on year to US1.6 million in 2Q14.

The Group’s ICT division registered a 24.1% year on year decline in revenue to US$42.6 million in 2Q14 due to delays in ICT expenditure in Indonesia and a slowdown in China and others. Consequently, ICT division contributed 55% of total revenue in 2Q14, down from 59.8% in 2Q13.

Here’s more from DMX Tech:

With the maturing analog to digital migration business and competitive software pricing, the Digital Media business reported a 7.5% yoy decline to US$34.4 million in 2Q2014. While lower revenue was reported forthe quarter, the Group continues to focus on increasing differentiated offerings for the Digital Media business. As a result, the Digital Media division contributed 44.5% of the Group’s total revenue in 2Q2014, an increase from 39.6% in the previous corresponding period.

Revenue from the Mobile Solution Services division declined 33.3% yoy to US$0.4 million in 2Q2014 as the shift to focus on mobile Software as a Service (“SaaS”) model for enterprises experienced slower than expected traction. This division contributed 0.5% of Group’s total revenue in 2Q2014, marking a slight decline from 0.6% in the previous corresponding period.

The Group’s gross margin moderated to 21.3% in 2Q2014 from 23.5% in 2Q2013 due to lower revenue recorded from Multi-media Software segment and hardware solution pricing competitions.