SAP Australia stuck in the red for another year despite earning over AU$1 billion

The company earned AU$1.19 billion in revenue in 2019.

SAP Australia continues to remain in the red for another year despite yet again earning over AU$1 billion in revenue for the year ended 31 December 2019.

For the year ended December 2019, SAP Australia's revenue uptake was AU$1.19 billion, a 2.4% increase compared to the year prior. 

Its cloud and software provided the lion's share of the company's total revenue, adding almost AU$714 million, while its services accounted for AU$475 million. 

"The company has delivered growth and is returning to profitability from total revenues as it continues to transition from upfront software revenue to subscription-based cloud revenue," SAP Australia said. 

SAP's Australian arm also shed AU$40 million off its material expenses, going from AU$580 million to AU$540 million -- a 9.3% decrease year over year. It also paid less rent in 2019, paying only AU$4.8 million compared to the AU$30 million from the year prior.

Staff costs increased, however, jumping by 8.6 percentage points from AU$357 million to AU$388 million. This amount was paid to 1,255 employees.

The company's depreciation and miscellaneous costs also went up to AU$64.5 million and AU$212 million, respectively, which were increases of 64% and 16%. 

On the tax front, the company paid AU$642,000 in income tax.

Bundled together, SAP Australia suffered a total loss of AU$20.4 million, which is a slight improvement from its total loss of AU$29 million in 2018.

Addressing the impacts of COVID-19 to its operations, SAP Australia said it had business continuity plans in place to respond to the outbreak, but could not provide comment on its overall impact.

"The management believes that this situation will not affect the company's ability to deliver services. The management is continually monitoring the outbreak but cannot estimate its impact on the company's performance as at the date of the approval of the financial instruments," SAP Australia said.

Earlier this week, SAP Australia's parent company in Germany announced plans to notify approximately 9% of its 440,000 customer base about security holes identified in some of its cloud-based products. 

According to SAP, the issues were discovered following an internal review of its platform, which found that some of its cloud products did not meet one or more contractually or statutory security standards.

The German software group did not elaborate on the nature of the security flaws, as the issues have not yet received fixes across its infrastructure.

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