Engineering solutions provider Ansys’s profit before interest and tax in the half-year ended September 30, increased by 645.9% to R51.1-million from R6.8-million in the comparative period.

The company attributed this significant increase to its continued investment in its operations, as well as the leveraging of its core competencies in innovation, design and production in the group.

Headline earnings also improved to R34.9-million from a profit of R4.3-million – an increase of 710.9%, which translated to an increase of 471.6% in headline earnings a share from 1.32c to 7.57c.

Despite the tough trading conditions in the railways market, Ansys continued to invest in its rail division, which saw revenue grow by 8.9% to R65.5-million from R60.2-million, with profit growing by 7.2% to R6.9-million from R6.4-million.

In its defence and information security division, revenue from Ansys’s Parsec Holdings acquisition – now fully accounted for in this reporting period – added 376% to its revenue at R115.2-million, from R24.2-million.

This was higher than expected and was mainly attributed to high-volume production sales from international opportunities, which came in earlier than expected. As a result of increased revenue and higher margins compared with the previous interim reporting period, the defence and information security segment profit grew by 872.3% to R13.64-billion.

Performance in the mining and industrial segment also improved significantly. Revenue for the period increased by 169.7% to R45.2-million from R16.8-million, while segment profit grew from R300 000 to R6.1-million. This is attributed to the full inclusion of revenue and profit from the Parsec Holdings acquisition as well as the impact of high-volume orders received during the period.

Meanwhile, accelerated fibre network roll-outs by all major telecommunications operators and subsequent demand in products saw Ansys increase its telecommunications segment revenue by 238.9% to R182.7-million. By optimising the supply chain function and implementing an effective foreign-exchange hedging strategy, overall profitability increased substantially, resulting in an increase in segment profit of 644.7% from R3.9-million to R29.3-million.

“In the short term we expect the economy to remain tight, with a negative general impact on economic growth in the local market. However, despite these challenging market conditions, we envisage to continue growing our business for the remainder of the year,” the company said in a statement released Tuesday.

“We expect the rail market to remain tough in the second half of the financial year, with possible softening in the next financial year.”

The mining and industrial segment outlook remains turbulent, but with signs of possible recovery. Ansys said it remained optimistic about this sector as the company was investing in safety and productivity-enhancing products. It also expects to see a turnaround in mining, with increased growth prospects in the medium term.

“We expect the local defence and information security market to continue to grow, albeit at a reduced pace. Our new offering, due to the integration of Ansys's and Parsec Holdings' defence capabilities, continues to offer opportunities for growth. The opportunities in the local and international defence business remain strong,” added the company.

Further, Ansys envisaged that the telecommunications sector would continue investing in network upgrades and builds, which continue to provide opportunities for growth. “Fibre network deployments are still in the initial growth phase and we expect them to continue to grow in the short to medium term.”