German software firm SAP bucks trend with quarterly rise in profit

SAP, Europe’s largest software provider, shrugged off the coronavirus crisis to post a significant rise in profit in the second quarter, according to results released on Monday.

Profit after tax climbed by 52 per cent year-on-year to 885 million euros (1 billion dollars).

This followed a programme of job cuts last year that ended up costing the German company almost 200 million euros.

SAP already released figures on second quarter revenue and operative profit earlier this month, showing that the company was weathering the current pandemic surprisingly well.

“More than ever, the pandemic has proven that digitalization is no longer an option but a must-have to withstand challenging times and to achieve desired business outcomes,” said chief executive Christian Klein.

The strong results came a day after SAP made the surprise announcement that it plans an initial public offering for its US subsidiary Qualtrics, which it acquired for 8 billion dollars early last year.

The subsidiary is part of SAP’s “cloud portfolio” and specializes in consumer market research.

Its revenue in the second quarter soared by 34 per cent to 168 million euros.

SAP plans to keep its majority stake in Qualtrics and provide more capital for the subsidiary, chief financial officer Luka Mucic said in a telephone conference.

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