Cisco Australia profit wiped out by AU$45m income tax adjustment

Networking giant paid a total of AU$86.2 million to ATO during 2019 fiscal year.

La Trobe University and Cisco join forces on all things IoT

Cisco Systems Australia has posted a AU$16 million after tax loss for the fiscal year between 29th July 2018 and 27th July 2019 following the Australian Taxation Office catching up to the networking giant and taking its share for prior years.

As filed to ASIC over the weekend before Christmas, Cisco Australia paid a total of AU$86.2 million in income tax during 2019 compared to AU$26.8 million a year prior.

In statutory terms, the company had an income tax expense of AU$58 million which consisted of current income tax of AU$15.8 million and an adjustment for prior periods of AU$44.7 million. Last year, the company reported an income tax expense of AU$21.2 million and current income tax of AU$21.8 million.

For revenue, Cisco Australia saw an increase from AU$1.84 billion last year to AU$1.97 billion, made up of AU$1.27 billion of product sales, and AU$411 million of services. This flowed through to a pre-tax profit of AU$41.8 million this year against AU$53.3 million in 2018, and once the increased income tax expense was taken into account, saw Cisco Australia post an after tax loss of AU$16.1 million compared to the AU$32 million profit for last year.

The employee benefits line item grew by AU$29 million to AU$414 million for 2019, with wages and salaries accounting for much of the rise from AU$366 million to AU$393 million.

Cisco Systems Australia has an immediate parent of Cisco Systems Netherlands Holding B.V. before reaching its ultimate parent Cisco Systems Inc in the United States.

Over the course of 2019, Cisco Australia took in AU$277 million in payments from related entities, while at the same time it paid out an extra AU$50 million in payments to related entities, which took the total outflow to related parties to AU$1.33 billion. That number consisted of AU$646 million paid to the US mothership, and AU$687 million to other related parties.

As part of the $1.9 billion deal which saw Cisco acquire Broadsoft, Cisco Australia gained Broadsoft Australia following its parent's AU$8 million purchase of the local company.

During its 2019 financial year, Cisco Australia announced it would spend AU$61 million over three years to bring its Country Digital Acceleration program to Australia, would invest AU$20 million into a new Webex data centre, and partnered with NBN on business bundles.

In November, Cisco overall announced net income of $2.9 billion from $13.2 billion in revenue for its first quarter.

The company said it expected revenue to decline by 3% to 5% for its second quarter.

Related Coverage

Cisco outlines silicon, software roadmap for next generation internet

The networking giant announced a multi-year plan for building and investing in 5G internet technology, including silicon, optics and software.

Cisco: All these routers have the same embedded crypto keys, so update firmware

Cisco removes static encryption keys that were shared across its small-business routers.

Cisco unifies its collaboration tools on one platform

Cisco also announced new collaboration devices and enhancements to its cloud calling solutions.

Cisco: These Wi-Fi access points are easily owned by remote hackers, so patch now

Cisco is urging customers with Aironet Wi-Fi access points to address four separate security flaws.

Cisco's internal network outage: Maybe you should use the cloud more (TechRepublic)

"Networking company suffers network outage" is definitely a source of schadenfreude for IT professionals, though there are lessons to be learned.