Story image

SAP NZ takes massive profit hit with cloud and software revenue down, services up

12 Jun 17

A rise in services revenue hasn't been enough to stop SAP New Zealand’s profit for the latest financial year crashing 97.5% - shaving more than $9 million off the company’s profit for the year and leaving it with profit of just $236,782.

The software and services vendor saw cloud and software revenue drop 8.4%, from $87.8 million to $80.4 million for the year ending 31 December 2016.

That decline was largely countered by an 18.1% rise services revenue, which climbed from $40.0 million to $47.3 million.

However, increased material expenses, staff costs, rent and other expenses saw the company’s operating profit for the year drop to $980,100 – down from $7.1 million a year earlier.

A $2.1 million income tax expense – up from $365,589 a year earlier – further impacted the company, which closed out the year with profit of just $236,782 – down from $9.6 million in 2015.

The declines came in a year which saw SAP doubling down on its New Zealand channel efforts. Last August, Rodolpho Cardenuto, SAP global president of global channels and general business, told ChannelLife NZ, the company was going ‘all channel, all cloud’ for the local SME market as it sought to grow its SME market share.

At the time, Sumal Karu, SAP Australia and New Zealand channels and general business manager, said the company saw a ‘massive’ opportunity across ANZ for its cloud offerings in the mid market.

The latest financial records show the company made donations to the tune of $183,411, up on 2015’s $110,000 while key management personnel received total compensation of $1.1 million, down from the $1.2 million recorded in 2015.

Total equity was nearly halved, from $60.4 million at January 01, 2016 to $30.6 million.

Mercury Energy sells smart meter business for $270m
“Metrix’s large installed meter base, deep customer relationships and innovation platform, make this a natural acquisition."
Dell EMC embeds security in latest servers
Dell EMC's 14th generation of PowerEdge servers has comprehensive management tools to provide security across hardware and firmware.
Hands-on review: The Logitech R500 laser presentation remote
With a clever ergonomic design, you’ll never have to glance at the device, unless you deliberately look to use the built-in laser pointer to emphasise your presentation.
Noel Leeming slapped with $200,000 fine for misrepresentation
“This prosecution related to multiple consumers in multiple locations. It was not isolated or ‘one off’ conduct.”
Review: Should you buy the Fitbit Charge 3?
If you are new the to the world of wearables you might be wondering if Fitbit’s new offering is a good first step. Maybe I can help with that.
The disaster recovery-as-a-service market is on the rise
As time progresses and advanced technologies are implemented, the demand for disaster recovery-as-a-service is also expected to increase.
Dell dominates enterprise storage market, HPE declines
The enterprise storage system market continues to be a goldmine for most vendors with demand relentlessly rising year-on-year.
Lenovo DCG moves Knight into A/NZ general manager role
Knight will now relocate to Sydney where he will be tasked with managing and growing the company’s data centre business across A/NZ.