SAP raises full-year forecasts after 33% jump in Q1 profit

Berlin

GERMAN business software maker SAP lifted its full-year forecasts on Tuesday, as it hailed a lift-off in profits in the first quarter and saw new opportunities after buying a US software firm.

Net profit at SAP surged 33 per cent year-on-year between January and March, from 530 million to 708 million euros (S$855 million to S$1.14 billion).

Operating, or underlying, profit booked even stronger growth, adding 52 per cent to top one billion euros, based on revenues roughly unchanged at 5.3 billion euros.

Sales of SAP's cloud-computing products, which allow customers to manage their data stored on the firm's servers, increased 18 per cent to almost 1.1 billion euros, while sales of licences and support for traditional software products fell 4 per cent to 3.3 billion.

"With an increasing share of predictable revenues, our beyond-expectations profitability is cause for even greater shareholder confidence," chief executive Bill McDermott said in a statement.

"Look for SAP to be bolder than ever in markets like customer relationship management."

SAP said in January that it hoped to close in the second quarter its acquisition of California-based Callidus Software and its technology for managing firms' interactions with their clients, its first buyout in more than three years.

Looking ahead to the full year, the group aims for a 5.5 per cent increase in revenue to between 24.8 billion and 25.3 billion euros -- measured using non-IFRS accounting standards, which exclude certain costs.

It had previously targeted a range of 24.6 billion to 25.1 billion euros for 2018.

Still in non-IFRS figures, it hopes to boost operating profits around 8.5 per cent, to between 7.35 billion and 7.5 billion euros, lifting the bottom end of the range by 50 million euros. AFP