iOCO Returns to Profitability: South African Tech Firm’s Turnaround Gains Momentum

South African IT services firm iOCO, formerly known as EOH, has reported a net profit of R123.5 million for the six months ended 31 January 2025, marking a significant milestone in its financial recovery.

The latest results signal a turning point for the company, which has struggled with losses, governance challenges, and declining investor confidence in recent years.

According to iOCO Group CFO Ashona Kooblall, the firm’s performance reflects disciplined execution, strategic cost management, and a streamlined operating structure.

While revenue dipped from R3.1 billion in the same period last year to R2.7 billion, the company saw a 159.3% surge in EBITDA, jumping from R97 million to R252 million.

“Despite a 6.4% revenue decline, iOCO achieved a 159.3% increase in EBITDA,” the company stated.

What Drove iOCO’s Financial Turnaround?

After years of losses, iOCO’s leadership implemented a three-phase strategy focusing on:

Cost rationalization – Eliminating loss-making businesses and unnecessary expenses
Decentralization – Shifting decision-making power to key business units
Resource allocation – Prioritizing high-growth and high-margin segments

The company’s efforts have yielded strong profit margins across the board:

• Gross margin improved from 27% to 30%

• Operating margin rose from 0.3% to 7.8%

• EBITDA margin surged from 3.1% to 9.2%

Additionally, iOCO’s software revenue grew by 15%, contributing to a 54% increase in EBITDA.

Leadership Shakeup and Market Response

Following years of governance issues, activist shareholders pushed for major changes, resulting in new leadership appointments.

The company recently named Rhys Summerton and Dennis Venter as co-CEOs, with both executives opting to forgo salaries and instead be compensated through their shareholdings.

Since these strategic shifts, iOCO’s stock has gained over 175% in the past 12 months, making it one of the best-performing stocks on the Johannesburg Stock Exchange (JSE).

From Crisis to Recovery: A New Era for iOCO

iOCO has come a long way from its troubled past, which included corruption scandals, asset sales, and a near-collapse under its former identity as EOH.

With its first profitable interim period in three years, strong cost controls, and renewed investor confidence, iOCO is positioning itself for long-term growth and stability.

Is this the beginning of a new era for iOCO? Only time will tell.

What do you think about iOCO’s turnaround?

{Source MyBroadBand}

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