IBM Australia revenue dropped by over AU$300m in 2019

It also declared that no dividend would be paid to its parent company for the 2019 financial year.
Written by Campbell Kwan, Contributor

The Australian arm of IBM has made its financial results for 2019 available, reporting net profit of AU$109 million, slightly down from the AU$119 million made a year prior.

Total revenue for the year, however, decreased by over AU$300 million to just shy of AU$2.6 billion, the cost of sales was reduced by around the same amount from AU$2.25 billion to AU$1.93 billion, while the company's selling, general, and administrative expenses remained steady at AU$453 million.

All of IBM Australia's segments submitted weaker revenue across the board year on year. This consisted of a AU$1.04 billion contribution from its global technology services, down from AU$1.16 billion; AU$622 million from its cloud and cognitive software, compared to AU$726.7 million; global business services chipped in AU$33 million less with AU$503 million in revenue; intercompany services and sales provided AU$299 million, AU$15 million less year on year; while its systems sales earned AU$111 million, a AU$61 million drop from the year prior.

Tax-wise, IBM Australia decreased its income tax payments from AU$52 million last year to AU$41.4 million for the year ended December 31, 2019.

Unlike last year, when the Australian arm of Big Blue paid a AU$150 million dividend to its parent companies, the company also declared that no dividend would be paid for the 2019 financial year.   

While the company did not mention how many staff it employs in Australia, it reported AU$687 million under the header of employee wages, almost AU$20 million less than the year prior. 

See also: IBM says it's giving employees the opportunity to 'compete for positions'

The Australian arm of IBM also had a board reshuffle during the 2019 financial year, with David La Rose, John Buhman, and Deidre McGrath stepping down from their director roles. La Rose, who was managing director of IBM Australia, moved to the United States to assume the general manager role for IBM Partner Ecosystem. 

Katrina Troughton and Anthony Martinetti were then appointed as directors in August and September, respectively, with Troughton taking on La Rose's mantle of managing director.

In July 2018, the local arm of IBM was handed a AU$1 billion contract from the Australian government to be its whole-of-government technology partner, which means all 17 departments -- even those not incumbent to IBM -- will be using Big Blue systems until 2023.  

It was revealed in March that Australian government entities publicly awarded nearly AU$4.3 billion to IBM Australia for services under the "engineering and research and technology-based services" and "information technology broadcasting and telecommunications" categories over a 10-year period spanning 2009 to 2019.

IBM Australia's parent company reported Q1 non-GAAP earnings per share of $1.84 on revenue of $17.6 billion, down 3.4% year on year.    


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