IBM New Zealand only mildly scalded by meltdown

Like its US parent, IBM New Zealand seems relatively unscathed by the recession - at least up until December 31. Its 2008 results, filed, today, show revenue rose 3% year-on-year to $391 million, but after tax profit fell 18% from the year-ago $16.8 million to $13.7 million.

The company says its revenue growth accelerated in the second half of the year, as companies turned to IBM’s outsourcing, consolidation and virtualisation products and services to help cut costs - mirroring trends the company has reported worldwide.

Increased salary costs seems to have accounted for some of the profit dip, with employee expenses rising to $102.9 million from 2007’s $92 million

IBM New Zealand’s services division clocked double digit growth and, overall, software and services accounted for 80% of revenue. The key software areas were business intelligence, Lotus portal software WebShpere.

The mid-market, defined as organisations with 100 to 1,000 employees, was IBM NZ’s key focus, and yielded double digit growth, the company says.

Major projects for the year included virtualisation projects for Air New Zealand and the BNZ, the creation and deployment of new online systems for the Earthquake Commission of New Zealand, and the third stage of IBM’s $141 million contract (the largest in NZ public sector history) to digitise Land Information New Zealand’s 30 million paper records.

The company won’t release any commentary on its result, or 2009 outlook, until next week.

Worldwide, IBM had revenue of $US103.6 billion for 2008, up from $98.8 billion for 2007. Profit was $US12.3 billion, up from 2007’s $US10.4 billion..

The company recently recorded a 4% profit rise for its first quarter of 2009, and reaffirmed its positive full year guidance.

NZ staff numbers stable
The tech giant is tightening its belt however, and announced it would trim its 400,000 strong global by 5000. A futher 4000 or so jobs are being shifted from the US to India.

So far, the cuts have not affected IBM New Zealand, whose total head count remains steady at 1000, an IBM spokeswoman told NBR today.