SAP Australia returns to profit as revenue drops

Mark Hettler (SAP)

SAP Australia has returned to the black, posting $46 million in profit for the year ended 31 December 2020. 

Despite the turbulent year brought by the COVID-19 pandemic, the software vendor turned around last year’s loss of $20 million to $46 million profit after tax. 

This came despite SAP’s revenue falling by 3.5 per cent to $1.14 billion, a significant decrease over last year’s growth of 25 per cent. 

However, revenue was notable for the rise in SAP’s cloud and software revenue, which rose from $713 million to $750 million. However, at the same time, services revenue fell by $475 million to $398 million. 

On the software side of the business, revenue also took a small hit as licence sales fell from $135 million to $131 million while support fell from $337 million to $331 million. 

SAP’s 'other income', on the other hand, rose significantly from $218,000 in 2019 to $4.4 million at the end of 2020. 

The results come as SAP embarks on a major restructuring program in 2021, across the global cloud services segment. 

According to SAP, this will be to accelerate the modernisation of its cloud infrastructure and harmonise its platform structure, according to its Australian financial report. 

Locally, the restructure is expected to impact “asset impairment” of data centres, with the global entity expected to reimburse Australia for the impending costs. 

Last year, Mark Hettler, SAP’s channel chief for A/NZ, told ARN he expected Australia to become a hotbed of SAP partner activity as the German software giant’s global channel market is set to hit US$260 billion by 2024.