Information and communications technology services group Gijima said it was “forging its way” back on track after reporting improved profitability during the six months to December 2013.

The JSE-listed group said earnings before interest, tax, depreciation and amortisation bounced back into the black with a positive R2.7-million achieved during the six months to December 2013, from a loss of R100-million reported in the comparative period the year before.

The group significantly narrowed it headline losses a share, which improved to 6.98c in the interim period to December, from 211.67c in the six months to December 2012.

While Gijima gained some traction in narrowing losses from continuing operations – from R106-million the year before – the R24.7-million total comprehensive loss for the period was marginally higher than the R23.7-million recorded in the interim period to December 2012.

“A continued tough market, the full effect of the expiry of two significant contracts from the 2012 financial year, as well as customer delays in awarding contracts, have resulted in continued pressure [on] top line performance,” Gijima noted.

A 19% decline in group revenue to R741.3-million, during the six months to December 2013, resulted from the impact of the 2012 loss of contracts, with the emergence of the in-sourcing of contracts during 2013 further compounding the effect of a loss-making contract.

However, Gijima secured R1.6-billion from the renewal of contracts and, in some instances, increased the scope of contracts.

“The turnaround strategy is showing significant progress in terms of cost reduction and a return to profitability,” the company pointed out, adding that an efficiency drive resulted in targeted cost savings of some R200-million a year.

Gijima’s systems engineering division experienced a “disappointing” six months, ending the period with revenue 38% down compared with December 2012. However, the division recorded a R100-million improvement on the R30-million loss for the period under review.

While the emergence of the full effect of the expiry of two major contracts, in the second half of 2012, had resulted in a 13% decline in revenue for Gijima’s services division, its profit for the period under review doubled to R17-million on the back of efficiency programmes.

The specialised solutions division and the group’s Namibia operation performed below expectations, with revenue down 24% compared with December 2012, while profit fell from R21-million in the first half of 2012 to R12-million in the six months to December 2013.