IBM NZ revenues tumble, profit halved

Wed, 8th Jun 2016

FYI, this story is more than a year old

IBM New Zealand saw its profit halved in 2015 as revenue plummeted more than $33 million year on year, as local sales for the company continued to decline.

The company recorded an after tax profit of $18.6 million for the year ending 31 December 2015, down $20.8 million on the year earlier. That profit came on operating revenue of $330.2 million – down from 2014's $364.1 million.

Revenue from sale of goods and services revenue both took a hit, with revenue from sales of goods down to $94.9 million, a 13% decline from 2014's $109.1 million; and services down more than $20 million, or 8%, to $229.0 million.

Financing was the only area to see an increase, jumping 24% to $6.5 million.

Income tax expense dropped from $12.0 million to $6.2 million, while selling, general and administrative costs were up from $38.0 million to $39.2 million.

The financials cover IBM New Zealand and its subsidiaries – IBM Global Financing New Zealand, Curam Software, Kenexa and JRA Technology.

The 2015 results follow a rough 2014 for the company which recorded its lowest sales figures in a number of years for FY14, with an operating revenue of $364.1 million. However, 2014's profit was one of the better results in recent years thanks to the sale of the x86 server portfolio business to Lenovo, and the sale of its customer care services business to Synnex.

Last year saw IBM New Zealand garner an extra $1.9 million as a gain on divestiture of businesses, due to a deferred income settlement with Toshiba Global Commerce solutions for the RSS divestiture.

The 2015 financial report notes that JRA Technology, which IBM New Zealand acquired in 2014, paid a dividend of $39 million to IBM New Zealand in March 2016, while Kenexa paid a dividend of $350,000 to the company.

IBM signed some significant deals across the ANZ region in 2015, including an AU$450 million deal with ANZ.

In September, IBM appointed Rhody Burton as the director of global business partners for Australia and New Zealand, responsible for transforming the company into a ‘one channel team'.