Technology distribution giant Ingram Micro has blamed problems with a new SAP-based enterprise system at its Australian subsidiary for a huge downturn in its global financial performance.
The parent company has reported record global sales of $8.72 billion, up 8 percent, for its first financial quarter, ended April 2. But net profit dropped from $70.3 million to $56.3 million – largely due, the company said, to “difficulties transitioning to a new enterprise system in Australia”.
Operating and net income “did not meet our expectations largely due to complications with our ERP system implementation in Australia,” said CEO Gregory Spierkel.
He added: “We’re diligently addressing these issues to drive improved profitability and performance as soon as possible. We are confident the future benefits of the new system outweigh some of the hurdles we are facing today.”
The Down Under problems also were partly blamed for a 24-point decrease in gross margin to 5.21 percent, and for a $21 million decline in Asia-Pacific operating income.
SAP A/NZ has said it is “actively engaged” with Ingram Micro in completing the implementation.