SAP shows losses of 16 per cent

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SAP has released its first quarter figures, showing a net income loss of 16 per cent.

It fell from €242 million (£216 million) in 2008 to €204 million for the first quarter of 2009. The results also showed revenue was down by three per cent, falling from €2.46 billion to €2.40 billion.

“While visibility for software revenues remains limited, we continue to take the necessary steps to protect our margin in this tough operating environment," said Léo Apotheker, co-chief executive of SAP, in a statement.

The “necessary steps” he mentioned included cutting some 2,200 staff, which also cost the firm a restructuring charge of €160 million in the first quarter, accounting for some of the loss.

"The cost containment measures that we initiated in October of last year and carried into the first quarter of 2009 have really taken hold, and we are pleased with the resulting margin performance. We will continue to maintain tight cost controls," added Apotheker.

“Our ability to deliver good margin performance in this environment, especially when you consider the restructuring charges related to the reduction of positions, is due to the strength, flexibility and scalability of our business model.”

The biggest dip for the company was in software sales. This area fell by 33 per cent from €622 million to €412 million.

“SAP’s revenue results were disappointing to investors [but] just as SAP’s customers have been making deep cuts in discretionary IT and other spending, so has SAP," according to a statement issued by Gartner's research director Thomas Otter.

“The bright spot of the results has been SAP’s success with its own cost cutting initiatives, running ahead of forecast in terms of cost reductions. SAP should not be surprised that its customers are following a similar strategy themselves.”

Last year, SAP reported losses of 22 per cent. The company is putting its future focus into products such as version seven of its Business Suite to see it through the recession.

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