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.
Written by Chris Duckett, Contributor

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.

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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