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Billion-dollar revenue fails to prevent SAP Australia posting AU$140m loss

Its comprehensive loss blows out six times over following income tax payment and higher costs.

Despite cracking the billion dollars in revenue, SAP Australia has posted a total loss of AU$140 million for the year ended December 31, 2017.

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The local arm of SAP made AU$1.04 billion in revenue, consisting of AU$647 million from cloud and software plus AU$399 million from services. Both figures increased 16 percent year on year.

However, at the same time, the company said its material expenses jumped from AU$451 million to AU$537 million, and staff costs grew from AU$326 million to AU$364 million. SAP Australia said it had 1,230 employees across its entities.

When bundled with other incomes and expenses, such as AU$4 million in restructuring costs, SAP Australia reported an AU$81.3 million loss before income tax, almost doubling the AU$44.5 million for fiscal year 2016.

Whereas half of the loss disappeared last year thanks to a AU$22 million tax benefit, for 2017, the company copped a AU$59 million tax charge, which took its after tax loss out to AU$140 million.

The parent company of SAP Australia, the German-based SAP SE, received a AU$977,840 dividend during the year, the same amount as a year prior.

In October, the company signed a whole-of-government agreement with the federal government.

"The SAP agreement will deliver savings through reduced duplication and administrative burden for departments," then-Assistant Minister for Digital Transformation Angus Taylor said. "Government is driving hard to reduce costs so that it can invest in innovative new solutions. We know that a coordinated approach to ICT procurement works."

Later that month, the CTO of the Australian Department of Human Services told ZDNet it would no longer use SAP end-to-end for its billion-dollar welfare payments overhaul.

Also during 2017, the Victorian government replaced SAP with a local startup for its IT procurement platform, and CITIC Pacific Mining became one of the first organisations in Asia Pacific to deploy the SAP Leonardo.

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