Apple New Zealand has reported a decline in both revenue and profit for the fiscal year ending June 2024, as detailed in its latest annual financial statements.
The company's revenue fell to $1.14 billion from $1.21 billion in the previous year - a decrease attributed primarily to reduced sales in its core product segments.
This decline was accompanied by a drop in net profit, which fell from $31.3 million in 2023 to $22.8 million in 2024.
Financial Overview
Revenue for the year stood at $1.14 billion, a 5.7% year-on-year reduction.
Sales of core Apple products, such as iPhone, Mac, and iPad, decreased from $1.18 billion to $1.11 billion, while service-related revenues saw a modest increase from $30.3 million to $33.9 million. The dip in product revenue weighed heavily on overall earnings despite the slight uptick in service revenues.
Cost of sales also declined, from $1.16 billion to $1.09 billion, resulting in a gross profit of $49.5 million, down from $54.6 million in the previous year. While gross profit margins remained consistent, the company faced additional expenses that impacted its overall profit.
Increased Costs and Operating Expenses
Apple New Zealand faced rising operational expenses, which contributed to the decline in net profit. Selling, general, and administrative expenses, although lower at $7.8 million (down from $12.6 million in 2023), along with net other expenses of $5.1 million, adversely impacted earnings. The company's foreign exchange loss, recorded at 4.8 million, was a key factor in this expense increase, highlighting the impact of currency fluctuations on its operations.
Finance income, which increased slightly to $1.4 million from $1.3 million, provided a marginal offset to these costs. However, the overall cost base weighed on the company's net earnings, leading to a 13% reduction in profit before tax, which amounted to $38.1 million compared to $43 million the previous year.
Cash Flow and Dividends
Operating cash flow for Apple New Zealand increased to $46.2 million from $42.4 million - indicating positive cash generation despite the profit decrease.
The company's net cash flow from operating activities amounted to $38.9 million after adjustments for tax payments and other factors, up from $27.7 million in the prior year.
Investments in property, plant, and equipment resulted in a cash outflow of $1 million, while the company's financing activities included dividend payments amounting to $31.3 million. The company's cash reserves at the end of the fiscal year stood at $15.9 million, marking an increase from $9.8 million in 2023.
Balance Sheet Highlights
Apple New Zealand's total assets grew to $119.7 million, with significant contributions from cash reserves and trade receivables. Inventory levels, however, decreased slightly to $703,000, reflecting a streamlined approach in inventory management. Property, plant, and equipment assets were valued at $7.4 million.
The company reported total liabilities of $97.1 million, a notable increase from $80.5 million in 2023. This rise was driven by higher trade payables, which surged from $14.7 million to $33.5 million. Current liabilities totalled $72.9 million, compared to $56.1 million in the previous year, while non-current liabilities remained steady at around $24.2 million.
Outlook and Challenges
The results underscore the impact of global economic pressures, including currency volatility and shifts in consumer demand, which have weighed on the company's performance. The statement shows that despite a resilient service segment, the company faces challenges in maintaining growth amid a competitive technology market and fluctuating foreign exchange rates.
