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IBM's local sales decline but profits lift in 2019 financial year

IBM's local sales decline but profits lift in 2019 financial year

Cognitive solution sales increase during 2019

Credit: Dreamstime

IBM reported a mixed 2019 financial year in New Zealand with sales down but profits up.

Profit before income tax was $27.5 million for the year ended 31 December 2019, up from $16.6 million in 2018.

However, IBM New Zealand recorded operating revenue of $257.9 million, down $18.1 million from the $276 million reported in 2018.

Sales of cognitive solutions starred during 2019, with the segment recording $83.5 million in revenue, up from $76.9 million in 2018 (see segment table below).

All other segments apart from intercompany sales and services declined in terms of sales.

Employee expenses fell from $60.7 million to $56.9 million.

During the year, IBM divested US$1.8 billion of its legacy product portfolio, including collaboration, commerce, digital experience, AppScan and BigFix solutions, to HCL. 

The New Zealand accounts valued the local portion of that sale at just over $1.2 million.

IBM New Zealand paid a final dividend of $45 million to its parent, Australia-based IBM A/NZ Holdings, down from $130 million in 2018.

IBM said it saw gains in software sales in 2019 and continues to invest in the strategic priority areas of cloud, AI and security. 

"These investments helped organisations across New Zealand to create innovative, secure business solutions and advance their digital strategies, a contribution recently recognised by the NZ Hi Tech Awards," the company said in a statement.

In 2019, IBM also made significant investments in local skills, launching the P-TECH (Pathways to Technology) education program.

P-TECH is an in-school education and workforce development initiative which prepares students for jobs of the future, while also addressing New Zealand’s skills shortages.


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