Citing record growth in its fourth quarter, SAP this week said its net income in the 1999 fiscal year grew 14 per cent.
The fourth quarter's rebound in sales contributed strongly to its financial results for the overall fiscal year, SAP said. Net income for the quarter, ended December 31, surged 109 per cent to 317 million euros ($A490 million), compared to 152 million euros in the same period a year ago.
Sales in the fourth quarter rose 30 per cent to 1.65 billion euros, up from 1.27 billion euros in the fourth quarter of 1998. Sales of SAP's new Internet-based line of products -- mySAP.com -- were a contributing factor, accounting for 129 million euros in licence sales. Total licence sales were 811 million euros, compared to 559 million euros in the fourth quarter of the previous year.
Net income for the 1999 fiscal year rose to 602 million euros, up from 527 million euros a year ago, according to a company statement based on preliminary earnings results. The German business software vendor's revenue increased by 18 per cent to 5.11 billion euros, up from 4.32 billion euros in 1998.
Taking into account an increased number of shares that it issued in 1999, SAP's earnings per share rose 14 per cent to 5.76 euros, up from 5.05 euros the previous fiscal year, the company said.
SAP's employee stock option plan, called STAR (Stock Appreciation Rights Program), however, put a damper on profitability, the company said. Pre-tax profit excluding costs associated with STAR grew 18 per cent to 1.12 billion euros, up from 948 million euros in 1998. With STAR taken into account, however, pre-tax profit only increased by 5 per cent, to 981 million euros, from 932 million euros.
SAP's revenue overall was lower than the vendor originally predicted at the start of the fiscal year. In October, the company revised its optimistic prediction of 20-25 per cent revenue growth for the year to 15-20 per cent. Like other vendors of ERP (enterprise resource planning) software, SAP was hit by companies deferring purchases of new software.
That trend was most marked in the Americas region, where SAP increased overall sales for the year by only 7 per cent, to 2.14 billion euros, from 2 billion euros in 1998. Annual revenue growth was healthier in EMEA (Europe, Middle East and Africa), growing 29 per cent to 2.41 billion euros, compared to 1.87 billion in 1998, and in Asia-Pacific, where sales rose 27 per cent to 506 million euros, up from 397 million euros.
SAP's consulting revenue grew most strongly, by 38 per cent, while product sales increased 14 per cent year on year. Training revenue fell by 4 per cent, SAP said.
Looking ahead, SAP expects revenues for the current fiscal year to be roughly double that of 1998.