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IBM NZ's sales and profits fall in 2018

IBM says the results reflect the cyclical nature of its business
IBM's NZ revenue and profits have fallen year on year.

IBM's NZ revenue and profits have fallen year on year.

IBM's New Zealand sales fell nearly eight per cent for the year ended 31 December 2018 while profit plummeted by 55 per cent.

The company's annual financial statements show sales declined from $297.4 million in 2017 to $276 million while net profit before tax fell from $37.1 million to $16.6 million.

The result comes after IBM's NZ business appeared to stabilise last year after a long sequence of declines. IBM's local business, for instance, boasted total sales of $429.7 million in 2012 and a pre-tax profit of $54.5 million.

Selling and administration costs in 2018 were up over $4 million to $32.8 million despite wages and salaries more than $8 million off year-on-year, down to $55.8 million.

By source, technology services and cloud platforms delivered $139.5 million in sales while cognitive solutions contributed $69.1 million, followed by global business services with $33.9 million (see chart below).

IBM NZ's revenue sources in 2018.
IBM NZ's revenue sources in 2018.

IBM said the 2018 results in New Zealand reflect the cyclical nature of software, hardware and services sales. 

"New Zealand is an important market for IBM," a spokesperson said. "Our client relationships are one of our key strengths, and we continue to invest in key infrastructure and skills locally. 

"IBM recently launched P-TECH, an education and workforce development initiative that will help address New Zealand’s skills shortages, particularly in digital technology."

IBM stumbled locally in recent years in a series of high profile projects such as Customs Joint Border Management System, a national cloud system for DHBs and cloud services for the All of Government IaaS panel.

Globally, IBM reported revenues of $79.6 billion for 2018, marginally up from $79.1 billion in 2017.