SAP records first quarter losses

Leading business software provider SAP has released its results for the first quarter of this year, during which it recorded losses in revenue and income.

The company said revenue for software and software-related service was €1.74 billion, a decrease of 2 percent from the corresponding period last year.

Operating income was €332 million, a decline of 8 percent, while operating margin was 13.9 percent representing a decrease of 0.7 percentage points from the same period last year.

The company said it would continue to devise measures to hedge against the tough economic times.

Says Léo Apotheker, co-CEO of SAP: “While visibility for software revenues remains limited, we continue to take the necessary steps to protect our margin in this tough operating environment,”

“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 marginperformance. We will continue to maintain tight cost controls. 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.”

He said operating cash flow from continuing operations was €1.39 billion, an increase of 30 percent while free cash flow was €1.34 billion an increase of 33 percent.

The company said the current quarter will be equally challenging.

“SAP expects the 2009 operating environment to remain challenging. In addition, 2009 will no longer include the effects from the acquisition of Business Objects, and like the first quarter of 2009, the second quarter of 2009 will be a difficult comparison to the strong results reported in the second quarter of 2008, which was prior to the economic crisis that disrupted the global markets beginning in the third quarter of 2008.”