HP South Pacific finds itself in the hole for 2019 fiscal year

Comprehensive loss of AU$10 million represents a AU$64 million reversal.
Written by Chris Duckett, Contributor
The new Hewlett Packard Enterprise (HPE) corporate headquarters, San Jose, Silicon Valley
Image: Andrei Stanescu / Getty Images

Hewlett-Packard South Pacific, HPE's Australia and New Zealand outpost, has reported a AU$64 million turnaround for its 2019 financial year to 31 October 2019, posting a AU$10 comprehensive loss compared to the AU$54 million profit from a year prior.

Overall, the company made AU$62 million less in revenue for 2019, reporting total revenue of AU$897 million for the year. Broken down, HP grew sales of goods from AU$536 million to AU$555 million, while services declined to AU$316 million from the AU$347 million it posted in 2018.

The company employed 904 people as of its fiscal year end, an increase on last year's 860 employees, but its employee payments expense decreased from AU$200 million to AU$174 million across the year, while its cost of sales increased to AU$675 million from AU$669 million.

Taken together, the company reported a pre-tax profit of AU$6.4 million against AU$50 million a year prior.

For income tax, HP South Pacific said it had a AU$9.2 million expense against a AU$4.15 million benefit from 2018.

In 2019, the company made a AU$6.4 million income tax adjustment for years prior, while last year the company had a AU$8 million adjustment and a AU$26 million movement charge related to deferred tax from prior years. Last year, the company also received an income tax refund of AU$7.6 million.

This left HP South Pacific with a post-tax loss of AU$2.8 million, which blew out to a AU$10 million loss once a recalculation of its retirement benefit obligations were taken into account.

Hewlett-Packard South Pacific is a company that is incorporated and domiciled in Australia. The immediate parent of the company is Hewlett-Packard Puerto Rico BV, incorporated in the Netherlands. Its ultimate parent entity is Hewlett-Packard Enterprise Company, which is incorporated in the United States.

The earnings report noted the company has liabilities that outstrip its assets by a margin of AU$428 million. It also has net liabilities of AU$521 million as of October 31 which remain an ongoing concern due to its parent company picking up the tab when the liabilities are due.

Just before Christmas, HP South Pacific issued 361 million shares to Hewlett-Packard Puerto Rico BV at a cost of AU$1 each.

During the fiscal year, two of its subsidiaries -- HP Enterprise Services Consolidated and HP Enterprise Services Australia -- were deregistered. While after the end of its fiscal year, HP South Pacific said it had agreed to purchase Cray Australia for AU$1.4 million and Cray New Zealand for AU$651,000.

The HP mothership agreed to purchase Cray for around AU$1.3 billion in May last year.

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