THE thing that makes you strong can also be a weakness. This turned out to be somewhat true for technology group Datatec.It operates in more than 60 countries — many of which are developing countries — in Latin America, Africa, North America, Europe, the Middle East and Asia-Pacific. This means it has to convert its earnings from these regions’ local currencies to its reporting currency, the US dollar.Having diverse geographical operations shields it from being dependent on one market but also leaves it vulnerable to fluctuations in its reporting currency.That is exactly what happened to Datatec. A strengthening dollar resulted in a 30% drop in operating profits to $110.5m for the year to end-February, while revenue stood still at $6.4bn.Currency strength certainly played a part in the fall in earnings but it got particularly knocked by capital controls in Angola, which have made the conversion from kwanza to US dollars "unpredictable".Over the past few years Angola has grown in imp...
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