Unisys takes heart after horror year of losses

By ADAM GIFFORD

Figures just filed with the Companies Office show IT hardware and services firm Unisys New Zealand had a horror time last year, making a $2.47 million loss on revenue of $130 million, which was sharply down on the previous year's $175 million.

New Zealand manager Grant Hopkins said about 13 per cent of revenue came from hardware sales, and the rest from services, a dramatic switch from the previous year when 36 per cent of turnover came from hardware.

"Last year we shipped very little technology.

"Our core services business grew 10 per cent, but profitability was down because no one bought technology," Hopkins said.

"For the year to date, revenue is 30 per cent up on the same time last year. The full-year outlook is strong with a strong turnaround in profit."

He said the sales of mainframe computers would push the technology contribution this year to about 20 per cent.

Services revenue was continuing to grow and this year Unisys had picked up outsourcing contracts with Police and Accident Compensation.

"Services revenue is up about 32 per cent year on year," Hopkins said.

IDC analyst Mark Cribbens said 2000 was an exceptional year for Unisys, because of the revenue it booked for mainframe sales and services driven by the Y2K panic.

"In 2001, they were adversely affected by the tight IT market. User organisations were cautious about their IT investments," Cribbens said.

"They also lost out on their investment in the ASP (application service provider) business, which didn't take off."

Earnings from an outsourcing deal with Clear were also less than expected because of Clear's merger with Telstra, which adopted a different IT strategy.

Cribbens said Unisys has restructured itself as an outsourcing and services business.

"The high growth and good margins in the IT sector are in services, and they have chosen to plunge in."

Worldwide, Unisys reported earnings for the three quarters ended September 30 of US$133.9 million ($267.8 million), on revenue of US$4.05 billion.

That compared with a US$102.3 million profit on revenue of US$4.46 billion during the previous comparable period.