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# Datatec says AI has started a tech supercycle, but a Brazilian court ruling did much of the lifting
- URL: https://www.businessbagel.com/datatec-says-ai-has-started-a-tech-supercycle-but-a-brazilian-court-ruling-did-much-of-the-lifting/
- Published: 2026-11-02T02:20:00.000Z
- Updated: 2026-11-02T02:20:00.000Z
- Description: Datatec's underlying earnings per share rose 56.5% in its first half, and TechCentral calculates that interest from a Brazilian tax ruling accounts for most of that growth.
- Author: Christian Maidman
- Tags: Companies, Business Bagel News

Datatec's chief executive thinks the technology industry is entering one of its rare long booms, and his results gave him plenty to point at. The JSE-listed group sells networking and cybersecurity gear through Westcon and IT services through Logicalis International, and those two divisions both reported record first-half adjusted earnings.

"There are many characteristics of a new technology supercycle," Jens Montanana told investors on Thursday. "We do not think this is a one-off moment." He did concede that the data centre "binge, or build-out, will at some point peak", but argued that the base of equipment already installed "has gone up and will stay up."

## The Brazilian ruling behind the 56.5%

Underlying earnings per share, the adjusted figure Datatec's directors present alongside the official numbers, rose 56.5% to 30.2 US cents. A good deal of that came from a courtroom. In March a Brazilian subsidiary of Logicalis Latin America won a final ruling in a case it filed in 2018, making corporate income tax it paid between 2013 and 2022 recoverable, with interest on top. Datatec booked $21.3 million of recoverable tax credits and $17.1 million of interest, and the interest is not taxed.

TechCentral did the sums. Without that $17.1 million of interest alone, it calculates, underlying earnings per share would have grown about 19%. Headline earnings per share, the official profit measure JSE companies have to report, rose just 1.4%.

## The business underneath the award

Logicalis Latin America, where the award landed, is heading the other way. Its revenue fell by almost a fifth, it swung to an operating loss of $6.7 million from a profit a year earlier, and Montanana called it a "structural decline" as the business tries to rely less on telecoms customers. More reorganisation is coming: "further actions are planned", he said.

The growth is coming from elsewhere, mostly the US. There, Logicalis International's gross invoiced income, the full value of what it bills customers, jumped 34%, according to TechCentral, while Westcon's order intake hit a record. AI demand "is more apparent in the US right now, but will ripple to everywhere else later", Montanana said.

Datatec is also handing back plenty of cash, and some of it was borrowed. The interim dividend rises 43% to R2.50 a share. Westcon borrowed $375 million from General Atlantic over six years at 9%, and the proceeds ended up funding a special dividend to Datatec's shareholders. The second half will carry that extra interest for all six months, finance chief Ivan Dittrich said.