Unisys NZ tech sales plunge, service revenue grows

Reporting a global Q2 loss, Unisys says its shift to as-a-service models and open systems is progressing.

Unisys New Zealand's 2014 revenue fell sharply in 2014, beaten down by a large decline in technology sales.

The company's local report reveals total sales fell from NZ$104.1 million for the year ended 31 December 2013 to NZ$76.8 million in 2014.

Service revenue grew slightly during the year, but that gain was offset by technology sales falling from NZ$38.8 million to NZ$7.7 million.

Unisys is a major supplier of New Zealand's Inland Revenue Department and a number of other government agencies as well as private companies such as Air New Zealand.

Steve Griffin, Unisys' country manager, said 2013 included a large technology transaction with Inland Revenue, so the two years are hard to compare.

"Our NZ services revenue grew in year-on-year in 2014 helped by the start of the modernisation of the NZ Tenancy Bond System for the Ministry of Business, Innovation and Employment as well as business with other clients," he said.

Unisys Corporation also reported its global second quarter 2015 earnings today, a net loss of US$58.2 million, including cost reduction charges of US$48.6 million and US$25.9 million of pension expense.

In the second quarter of 2014, the company reported a net loss of US$12.1 million.

Second-quarter revenue declined 5 percent to US$765 million from US$806 million the year before. On a constant currency basis that revenue grew 4 percent.

Griffin said New Zealand companies, in line with global trends, are looking at new ways of IT procurement and delivery via "as-a-service" models enabled by cloud computing and for more open systems.

"Unisys has responded to this challenge by enabling our traditional expertise and offerings, such as IT service management, to be delivered as-a-service as well as developing the Forward! platform based on Intel architecture," he said.

"Because we specialise in supporting mission critical processes these typically involve long sales cycles so it can take a while before you see new technology implemented."

Unisys President and CEO Peter Altabef said he was pleased to see solid, constant currency revenue growth during the quarter.

"We are aggressively implementing our new operating model to be a more nimble, focused and responsive company that anticipates and rapidly responds to market opportunities globally."

Cost cutting is expected to generate annual savings of approximately US$200 million by the end of 2016.

As a result, Unisys expects to recognize a pretax restructuring charge of around US$300 million over the next few quarters including charges recognised in Q2.