Data#3 says financials were impacted by chip shortages

business, chip shortages, data3, laurence baynham, managed services, msp, public cloud, services, technology

Data#3 has revealed that the ongoing global shortages of silicon chips has impacted its 2021 financial year.

The ASX-listed managed services provider said it missed out on an additional $3 million in pre-tax profits after seeing an increase in product delivery delays in the second half due to the shortages.

Data#3 said it resulted in “a significant backlog of orders” that could not be delivered or invoiced at year end.

In spite of that, profit and revenue still increased during the period on the back of its services business.

Net profit before tax was up 8.4 percent from $34 million to $36.9 million, while net profit after tax increased 7.5 percent from $23.6 million to $25.4 million. Revenue grew 20.3 percent from $1.6 billion to $1.96 billion.

“We knew that FY21 would be challenging after a record profit performance in FY20. Our goal is to provide our shareholders with sustainable earnings growth, and we are pleased to announce that we delivered another record result,” Data#3 chief executive Laurence Baynham said.

“The result reflects improving services profitability and demonstrates the inherent strength and relevance of our solution offerings in a rapidly evolving market. Our pre-tax profit would have been approximately $3 million higher if it was not for the global supply delays in computer chips. The large backlog underpins a fast start to FY22.”

The company said revenue growth came on the back of strong customer demand, with public cloud revenues taking the biggest leap. Public cloud revenues increased 36.2 percent from $580 million to $791.6 million, driven by wins in the enterprise and Government sectors.

Looking ahead, Data#3 expects to continue its growth, predicting that the Australian IT market as a whole would continue growing “at a record rate” this year. It also said the backlogs would also provide a fast start to the 2022 financial year.

“We expect technology, and specifically digital transformation, to play the leading role in Australia’s economic future, irrespective of any ongoing impacts of the pandemic,” Baynham said.

“We are already seeing a return of larger infrastructure projects across our corporate and public sector customers.”

Despite the positive outlook, Data#3 said it is unable to provide specific guidance for FY2022.

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