Hewlett-Packard South Pacific net loss blows out in 2017

A tumultuous year has seen Hewlett-Packard South Pacific walk away with a net loss of AU$48 million.
Written by Chris Duckett, Contributor

A year of divestments and purchases has resulted in the South Pacific arm of Hewlett Packard Enterprise clocking up a net loss of AU$48 million, a near fivefold increase on the AU$9.7 million loss for last year, and a total comprehensive loss of AU$27 million.

For the year ended October 31, 2017, HP South Pacific gained AU$980 million in revenue, including AU$504 million from goods and AU$473 million in services, a substantial drop on the AU$2.1 billion reported for FY16. Expenses also more than halved, moving from AU$2.1 billion to AU$1 billion over the year, including a drop in employee benefits from AU$767 million to AU$291 million.

The company said in its yearly report that it now has 1,016 employees.

The year was marked by a number of purchases, and finalisation of a number of sales and divestments.

The spin-merge of its enterprise services arm with Computer Sciences Corp to create DXC technology, which was finalised at the end of March, saw the South Pacific arm sell its share for AU$229.6 million and take a loss on disposal of AU$8.3 million.

A similar move saw HPE depart with its software business and spin it into Micro Focus, in a transaction valued at almost $9 billion. For HP South Pacific, the shift completed at the end of August saw the company report a sale of AU$23 million, and a loss on disposal of AU$16.8 million.

On the purchasing front, over the course of the year, HPE purchased SGI for $275 million, Nimble Storage for $1 billion, and Simplivity for $650 million.

Locally, this left Hewlett-Packard South Pacific to find AU$1.07 million for SGI, AU$14.2 million for Nimble Storage Australia Pty Ltd, and AU$4.1 million for Simplivity (Australia).

On the income tax front, the company paid AU$1.25 million, a massive rise on the AU$178,000 for the year prior.

Despite the addition of this year's loss, which took its accumulated losses to AU$775 million, the company received a AU$736 million equity injection during the year that allowed the company to reduce its net liability position from AU$1.2 billion to AU$571 million.

The company added that after its reporting date, Hewlett-Packard Australia agreed to sell property in Forest Hill, Victoria, for AU$88 million, with the sale expected to be completed in the third quarter of financial year 2018.

Hewlett-Packard South Pacific has Hewlett-Packard Puerto Rico BV, which is incorporated in the Netherlands, as its immediate parent, before rolling up into HPE in the US.

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