IBM Australia's net profit takes a hit after $41M tax bill

IBM Australia's net profit takes a hit after $41M tax bill

Revenue slipped from $2.58 billion in 2019 to $2.39 billion in 2020.

Credit: IBM

IBM Australia's net profit slid from $109.1 million to $89.7 million for the financial year ending 31 December 2020 after forking out $41 million for a tax bill. 

Revenue slipped from $2.58 billion in 2019 to $2.39 billion in 2020, according to the latest financial report filed by the company with the Australian corporate regulator. 

By segment, revenue from within its global technology services unit significantly dropped from $1.03 billion to $868.4 million while 'intercompany' services and sales sat at $251.6 million in revenue, down from $298.9 million in the previous year.

The only areas that saw revenue increase across the IBM business were cloud and cognitive software, which contributed $635.6 million in revenue, slightly up from $622 million in 2019, and global business services, which witnessed a slight increase from $503.6 million to $508.6 million in 2020. The systems unit also slightly rose from $111 million to $115.9 million in 2020. 

In October, IBM globally announced it would separate its managed infrastructure services unit of its Global Technology Services segment into a new public company, which was named Kyndryl in April. This separation is expected to be completed at the end of this year.

Last year, IBM back-paid 1,647 Australia staff $12.3 million after admitting to underpaying them for almost a decade.

The global tech giant entered into an enforceable undertaking with the Fair Work Ombudsman (FWO) to back-pay the employees, many of whom were lower-salaried call centre workers in Ballarat.

According to the FWO, IBM identified employees that were underpaid between 2012 and 2020, with back payments ranging from $1 to over $145,000.

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