Apple New Zealand has reported a decline in both revenue and profit for the fiscal year ending June 2024, as detailed in its latest annual financial statements.
The company's revenue fell to 1.14 billion from 1.21 billion in the previous year - a decrease attributed primarily to reduced sales in its core product segments.
This decline was accompanied by a drop in net profit, which fell from 31.3 million in 2023 to 22.8 million in 2024.
Financial Overview
Revenue for the year stood at 1.14 billion, a 5.7% year-on-year reduction.
Sales of core Apple products, such as iPhone, Mac, and iPad, decreased from 1.18 billion to 1.11 billion, while service-related revenues saw a modest increase from 30.3 million to 33.9 million. The dip in product revenue weighed heavily on overall earnings despite the slight uptick in service revenues.
Cost of sales also declined, from 1.16 billion to 1.09 billion, resulting in a gross profit of 49.5 million, down from 54.6 million in the previous year. While gross profit margins remained consistent, the company faced additional expenses that impacted its overall profit.
Increased Costs and Operating Expenses
Apple New Zealand faced rising operational expenses, which contributed to the decline in net profit. Selling, general, and administrative expenses, although lower at 7.8 million (down from 12.6 million in 2023), along with net other expenses of 5.1 million, adversely impacted earnings. The company's foreign exchange loss, recorded at 4.8 million, was a key factor in this expense increase, highlighting the impact of currency fluctuations on its operations.
Finance income, which increased slightly to 1.4 million from 1.3 million, provided a marginal offset to these costs. However, the overall cost base weighed on the company's net earnings, leading to a 13% reduction in profit before tax, which amounted to 38.1 million compared to 43 million the previous year.
Cash Flow and Dividends
Operating cash flow for Apple New Zealand increased to 46.2 million from 42.4 million - indicating positive cash generation despite the profit decrease.
The company's net cash flow from operating activities amounted to 38.9 million after adjustments for tax payments and other factors, up from 27.7 million in the prior year.
Investments in property, plant, and equipment resulted in a cash outflow of 1 million, while the company's financing activities included dividend payments amounting to 31.3 million. The company's cash reserves at the end of the fiscal year stood at 15.9 million, marking an increase from 9.8 million in 2023.
Balance Sheet Highlights
Apple New Zealand's total assets grew to 119.7 million, with significant contributions from cash reserves and trade receivables. Inventory levels, however, decreased slightly to 703,000, reflecting a streamlined approach in inventory management. Property, plant, and equipment assets were valued at 7.4 million.
The company reported total liabilities of 97.1 million, a notable increase from 80.5 million in 2023. This rise was driven by higher trade payables, which surged from 14.7 million to 33.5 million. Current liabilities totalled 72.9 million, compared to 56.1 million in the previous year, while non-current liabilities remained steady at around 24.2 million.
Outlook and Challenges
The results underscore the impact of global economic pressures, including currency volatility and shifts in consumer demand, which have weighed on the company's performance. The statement shows that despite a resilient service segment, the company faces challenges in maintaining growth amid a competitive technology market and fluctuating foreign exchange rates.
Directors also noted that they have implemented measures to safeguard the company's assets and strengthen internal controls, which they believe will support the financial integrity of Apple New Zealand moving forward.
