Dell Australia's full-year profit drops to AU$34m

Nearly AU$260 million of its AU$293 million revenue total came from other Dell Technologies entities.

Dell Australia has made available its financial results for the year ended 31 January 2019, reporting a drop in after-tax profit from AU$52.4 million in 2018 to AU$33.6 million.

The local arm of the tech giant paid AU$15 million in tax for the 12-month period.

Revenue for the year totalled AU$293 million.

In its results submitted to the Australian Securities and Investments Commission, Dell Australia said the "principal continuing activity of the company is the facilitation of the sale of personal computer hardware and peripherals on behalf of a related entity and the rendering of IT consulting services".

Commission income from related parties for the financial year was AU$259 million, while the sale of locally procured product to a related party was AU$99.6 million. Service fees earned was AU$33.9 million, and service fees charged by related parties was AU$6.6 million.

Dell Australia received a total of AU$266 million from related parties.

Related parties of Dell Australia based in Australia are: Dell Financial Services Pty Ltd, EMC Global Holdings Company, and SecureWorks Australia Pty Ltd. Those based in the US are: Boomi, Inc, Dell Products LP, Dell USA LP, and SecureWorks, Inc. Also listed as related parties are Dell (China) Company Limited and Dell Global BV (Singapore Branch).

The company's immediate parent entity is Dell International LLC, a corporation incorporated in the United States. The ultimate parent entity is Dell Technologies Inc.

Last week, Dell Technologies, which only returned to public trading in December, reported first quarter earnings of $329 billion, or 38 cents a share, on revenue of $21.9 billion, up 3% from a year ago.

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In Australia, Dell recently announced the launch of five dedicated spaces for customers and partners to learn what artificial intelligence (AI) is, and how it differs from machine learning and statistics and modelling, to avoid failed IT projects.

The five Dell EMC AI Experience Zones are open in Bangalore, Seoul, Singapore, and Sydney, and Tokyo will be operational later this month.

The zones are located in the company's Customer Solutions Centres in each of the cities, and all house large Dell EMC high performance computing systems that are designed specifically to help train an AI algorithm.

Speaking with ZDNet, high performance computing and AI chief technology officer for Dell EMC in the Asia-Pacific and Japan (APJ) region Andrew Underwood said the idea for the zones is essentially to help customers avoid the high failure rate of AI projects.

In a bid to avoid double taxation on cross-border dealings, Dell Australia entered into an Advance Price Arrangement (APA) with the Australian Taxation Office (ATO) on 1 February 2017. As part of the APA terms, Dell Australia said it had agreed to an additional compensating adjustment of AU$36.5 million for the period spanning 1 February 2014 through 31 January 2017.

As a result of the APA only being finalised last financial year, the company used its 2019 filing to state it had remeasured its operating profits in past years, adjusting its 2018 results by AU$10.9 million.

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