Oracle profits despite revenue dip

By ADAM GIFFORD

Software company Oracle New Zealand managed to maintain its profit level in the last financial year, despite revenue falling about $5 million.

Results for the year ended May 2002 have just been filed with the Companies Office, about the same time the company closed its books on the 2003 year.

They showed an $8.2 million profit on revenue of $48.8 million. The profit was just $17,000 down on 2001, when revenue was $53.2 million.

About $3.2 million was paid in tax, almost twice the 2001 total.

"We were pleased with the results, given the climate in that period," said country manager Robert Gosling.

"We planned for a slowdown in business and managed our costs."

The number of deals was about the same, but customers were buying software in smaller chunks, he said.

The result was helped by Fonterra's decision to switch manufacturing at the former Kiwi Dairies site in Hawera to the Oracle applications used by the former NZ Dairy Group plants.

Gosling would not release numbers for this year, but said they were in line with other countries in Oracle's Asia-Pacific region.

In the year ended last month, the company's total revenue dropped 2 per cent to US$9.5 billion ($16.2 billion), but net income was up 4 per cent to US$2.3 billion.

In Asia-Pacific, total revenue was US$1.37 billion. Sales of new software licences, a critical measure of corporate health in the industry, were down 12 per cent to US$517 million for database technology but up 20 per cent to US$91 million for applications.

Given that applications, including maintenance and consulting revenue, accounted for about 28 per cent of Oracle's total global business in fiscal 2002, the New Zealand applications total would be under $14 million.

That means it would have been outstripped in the local market by rival PeopleSoft, which increased revenue from $12.4 million to $23.4 million during calendar 2001, which is also its fiscal year.

Gosling said much of Oracle's business in New Zealand would come from selling more software and services to existing customers.

"In the last 18 months the demand for data warehouses in New Zealand has grown significantly and we have won a major chunk of that business."

He said companies were installing warehouses so they could analyse their data in detail without having to replace older operational systems, which they could not afford to do.

Significant recent Oracle sales included technology for the ACC's debt-collection system, procurement software for the State Services Commission's GoProcure system, one of the first implementations anywhere of the new enterprise asset management package at Solid Energy in Christchurch, data warehousing deals at NZ Post and Loyalty, and technology infrastructure for Otago University.

Oracle was about to start trials with a university and Government agency of its new Collaboration Suite, which allowed organisations to manage email, calendaring, file sharing and other common office applications from a single database.