SAP Australia posts AU$29m loss for FY18 despite billion-dollar revenue
SAP Australia has once again gained over AU$1 billion in revenue, but still posted a total loss of around AU$29 million for the year ended December 31, 2018.
The local arm of SAP made AU$1.16 billion in revenue. This consisted of AU$698 million from cloud and software, and AU$461 million from services, resulting in 8% and 15.5% increases year on year, respectively.
However, at the same time, the company said its material expenses jumped from AU$537 million to AU$579 million, while staff costs remained somewhat steady, only increasing from AU$355 million to AU$357 million.
When bundled with other incomes and expenses, such as AU$30 million in rent costs, SAP Australia reported a AU$27.7 million operating loss before income tax, which is significantly less than the AU$81.3 million operating loss before income tax in 2017.
SAP Australia received smaller tax benefit compared to last year -- from AU$4.5 million in 2017 to AU$1.2 million in 2018 -- but the company had a cash inflow of AU$103.5 million from operating activities for the financial year, a significant increase from the AU$57.4 million inflow reported last year.
The parent company of SAP Australia, German-based SAP SE, received a AU$977,840 dividend during the year, the same amount as the previous two years.
The parent company earlier this week reported an operating loss of €136 million IFRS in Q1 2019, chiefly resulting from a restructuring effort designed to tighten up the tech giant's growth margins in the future.
"SAP is going to win operationally. What you will see over the next several years is that SAP will become the very best version of itself and achieve our vision for a best run SAP. This is the motto of the company, the maxim of the brand and the organizing principle on our path to further expand our profitability for our shareholders," CEO Bill McDermott said on a first-quarter earnings conference call.
As of late, SAP has been forgoing big acquisitions and going the tuck-in route, conducting a big evaluation of its business operations to bolster efficiency, growing cloud profit margins, and looking to boost shareholder value spurred by an investment from activist investor Elliot Management.
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