One offs dampen IBM NZ's profits

Without the adjustments pre-tax profit would have grown by 20%, says IBM

One-off adjustments reduced IBM New Zealand’s profit for 2007.

The company posted an after-tax figure of $16.79 million on increased revenue of $381.49 million. This compares with 2006 figures of $20.14 million and $357.58 million.

However, two one-off adjustments totalling $6.9 million were made, relating to goodwill calculated in relation to IBM Global Business Services and to the liquidation of Ascential Software, the latter done for administrative convenience in line with policy to minimise subsidiaries. IBM says that without the adjustments pre-tax profit would have grown by 20%.

Software and systems, two of the higher-value business units, grew revenue in 2007 at around three times their respective market rates, delivering double-digit profit growth.

IBM says this reflects changes made in the business model over the past five years to shift the business mix toward higher value, more profitable segments of the industry. In 2005, the company posted revenue of $402.68 million and net profit of $56.76 million.

However, IBM says making comparisons to 2005 is difficult because it is a different business now. It has since divested the PC business, which accounted for about half of revenue decline between 2005 and 2006.

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