Mustek reported much lower profits in its half-year results despite also recording substantially higher revenues.
Mustek has released its half-year results showing a 17.9% year-on-year increase in revenue from R4.2 billion to R4.9 billion.
Explaining its lower profit, Mustek said it began reducing margins on entry-level laptops for which it had too much stock.As a result, its gross profit margin decreased from 16.2% to 14.1%.“The other major impact on profit was increased finance cost from higher interest rates.” “The group’s IT training company, Mecer Inter-Ed, continues to contribute meaningfully to revenue and profitability and has been disclosed as a separate operating segment in the current reporting period.”Mustek also noted that the rand-dollar exchange rate weakened, causing increased foreign currency losses from R56.9 million to R62.9 million.
Mustek said its cost base reduced from 8.4% of revenue on 31 December 2021 to 7.9% by the end of 2022.
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