Gijima: “Who Am I Online” settlement a painful blow

Carlos Ferreira, Chief Financial Officer, Gijima (Image: File photo)

Restructuring and renewed focus on core customers may be the life-line which helps Gijima recover from a R373.9 million settlement.

IT News Africa attended the interim results presentation in Sandton today, during which Gijima CEO, Jonas Bogoshi, and CFO, Carlos Ferreira, tried to reassure investors that Gijima would be able to recover from the loss incurred by the company in a settlement with the Department of Home Affairs.

On Monday the company announced that they had reached a settlement with Home Affairs in a long-running contractual dispute over the R2 billion Who-Am-I-Online (WAIO) tender which was awarded to Gijima in 2007. Home Affairs disputed the contract last year in a letter accusing Gijima of non-delivery and denying the authority of the accounting officer to sign the contract on behalf of Home Affairs. After almost a year of negotiations the two parties have come to a settlement in which both assume equal responsibility for the dispute.

“The settlement brings the project back in line with the original objectives and budget,” reads the statement released by Gijima at the presentation today, which continues “The settlement is the best solution possible for both parties. Gijima will continue to work as Home Affairs’ partner to deliver on this project – our focus will be on delivering quality work, on time and within budget.”

Despite a 13.6% reduction in revenue from last year, and earnings before deductions (EBITDA) falling by 72.8% in the wake of the WAIO settlement, Jonas Bogoshi is optimistic about the company’s future “WAIO hurt us, but we have moved on,” he said during the presentation today. “This company can trade out of this and we must move on.”

In a private interview with IT News Africa after the main presentation, CFO Carlos Ferreira outlined the company’s strategy for recovery. One of the company’s new areas of focus will be cloud computing. Although migrating to the cloud is not for everybody, “less than half of consumers are eligible” according to Ferreira’s research, Gijima will be “investing in building blocks to get to cloud services.”

The company is also going to revitalise the way it deals with its customers. Their Integrated Services Center will do as the name suggests, giving customers a single channel of contact with the company. “The way we serve our clients is changing quite dramatically and it’s all part of this whole cloud evolution.” Ferreira said. Furthermore, Gijima will focus on growing their industry-specific offerings in the mining and banking sectors.

The expansion of broadband in Africa is a huge opportunity to Gijima, who are eager to capitalise on the massive growth in Internet access by creating relevant, useful, customer-centered software applications which allow businesses to access Gijima’s cloud solutions such as SAP-on-Demand and Business Edge (an open source ERP for smaller companies).

Ferreira and Bogoshi both freely admit that Gijima has made big mistakes in their dealings with the DHA. But they are also keen to see the market take a “long term view” in which the R373.9 million settlement would appear normalised when compared to the overspend on WAIO infrastructure and the potential for future business.

By Angela Meadon