Microsoft NZ lifts full-year profit 15% but Oracle NZ posts loss

Microsoft New Zealand, whose ownership was recently transferred to Bermuda, lifted annual profit 15 percent as the local arm of the world's biggest software developer boosted sales of its consulting services, while its smaller rival Oracle New Zealand sank into the red after booking an impairment charge.

Auckland-based Microsoft NZ reported a profit of $14 million in the 12 months ended June 30 compared to $12.2 million a year earlier, financial statements lodged with the Companies Office show. The software developer lifted revenue 7.6 percent to $115.2 million as consulting sales jumped 42 percent to $36.1 million, offsetting a 3.6 percent decline in related party commission revenue to $74.4 million. That also outpaced a 27 percent increase in consulting expenses to $5.6 million.

Despite the increase in external revenue and profitability, Microsoft didn't declare a dividend to its parent group, the first time since the 2008 financial year.

A spokesman for Microsoft said the company declined to comment, however, group accounts show the Seattle, Washington-based company's consulting and product support service revenue slipped 0.9 percent to US$5.56 billion. Those services fall under the enterprise umbrella, which helps customers develop and deploy Microsoft IT systems.

Microsoft is now challenging New Zealand's incumbent IT services firms such as Datacom and Spark New Zealand, with research house IDC's recent New Zealand IT Services Ecosystem Study 2017 finding Microsoft the third-most cited top-3 IT services providers.

The company is one of several currently being probed by IRD over alleged tax avoidance.

Oracle New Zealand posted a loss of $16.2 million in the 12 months ended May 31, compared to a profit of $495,000 a year earlier, with revenue falling 4.5 percent to $140.7 million. That included a $17.5 million impairment charge to goodwill, which was valued at $$16.6 million after the writedown. About $32.8 million of that goodwill arose from Oracle's 2010 Sun Microsystem acquisition and a further $1.2 million came from its purchase of eServGlobal.

Like Microsoft, Auckland-based Oracle NZ didn't make a dividend payment to its parent in the 2017 financial year.

(BusinessDesk)