HEWLETT-Packard’s New Zealand subsidiary has doubled its revenue but reduced its profit by more than two-thirds in its latest financial year, which ended October 31, 2003.
But the company says despite a drop in net surplus it met its revenue targets and the cost of its failed bid for a Fonterra outsourcing contract had little impact on financial performance.
Financial statements made available by the Companies Office last week show HP turned over $539 million for the period, compared to $276 million the previous year. After tax profit was $2.6 million – or 0.5% of revenue – versus $9.6 million and 3.5% in 2002.
The latest result is the first since the merger of HP’s and Compaq’s operations, which took effect from December 1, 2002. This means Compaq’s contribution for November 2002 is excluded from the accounts.
Compaq’s last full-year result before the takeover was the year to December 31, 2001, which produced turnover of $323.1 million and an after tax profit of $2.8 million.
HP acting chief executive Simon Tong was unavailable for comment but spokesperson Ken Erskine says currency hedging — and not its Fonterra bid — is the main reason profit fell.
“The impact to the 2003 results for New Zealand was $18.3 million,” he says in a written statement. “[Fonterra had] no discernible impact.”
In September, Fonterra awarded a near-$600 million dollar outsourcing contract to EDS, and sources said at the time that they estimated a bid for such a contract would have cost at least $10 million.
Erskine would not give details of the year’s products and services sales. “We are unable to comment on local business splits [but] I can advise that all areas of our business, hardware, services and software, met or exceeded their HP targets for [the 2003 year].”