Schneider Electric IT’s NZ branch posts strong revenue growth amid shift in contract mix

Schneider Electric IT Australia – New Zealand Branch has posted solid financial results for the year ended 31 December 2024, highlighting a marked rebound in revenue and net profit, driven by growing demand for maintenance services and equipment sales, despite a changing service mix.

Revenue growth driven by maintenance and equipment sales

The branch reported revenue of NZ$21.73 million in 2024, a significant increase of 37.7% compared with NZ$15.78 million the previous year. This growth was largely attributed to a substantial rise in revenue from maintenance contracts, which more than doubled from NZ$3.81 million in 2023 to NZ$10.51 million in 2024. Equipment sales also saw a moderate increase to NZ$6.16 million, up from NZ$5.47 million.

In contrast, revenue from solution contracts fell to NZ$4.47 million, down from NZ$5.93 million in the prior year, indicating a shift in the company's operational focus. Software revenue remained relatively stable at NZ$596,000.

Geographically, New Zealand continued to serve as the primary market, contributing NZ$20.45 million of the revenue, while sales to other regional markets, such as Australia and New Caledonia, remained marginal by comparison.

Improved profitability amid cost control

The company recorded a net profit of NZ$3.12 million, up from NZ$2.85 million in 2023, representing a 9.5% increase. Gross profit also climbed to NZ$6.41 million, compared with NZ$4.74 million in the previous period. Cost of sales increased proportionally to NZ$15.32 million from NZ$11.03 million, in line with the rise in revenues.

Operational expenses remained contained. Administrative expenses fell slightly from NZ$294,000 in 2023 to NZ$266,000 in 2024. However, other operating expenses rose from NZ$115,000 to NZ$265,000, primarily due to a NZ$232,000 increase in miscellaneous operating costs and the emergence of bad debt expenses (NZ$23,000) not present in the prior year.

Strengthened financial position

The branch's financial position also strengthened, with total assets increasing to NZ$20.93 million from NZ$17.46 million the previous year. The rise was driven primarily by higher cash and cash equivalents, which grew to NZ$15.07 million, up from NZ$11.83 million in 2023. The majority of this cash (NZ$12.79 million) is held by the group's central treasury, underlining the role of cash pooling arrangements within the wider Schneider Electric structure.

Liabilities increased marginally, with total current liabilities reaching NZ$4.20 million (up from NZ$3.78 million), mainly due to higher trade payables and contract liabilities. Nevertheless, the company's net assets rose to NZ$16.73 million from NZ$13.62 million a year earlier, reflecting retained earnings accumulation from consistent profitability.

Contract balances and taxation

Contract liabilities more than doubled to NZ$2.46 million, indicating increased prepayments from customers or unearned revenue. Meanwhile, contract assets also grew from NZ$36,000 to NZ$633,000, signalling heightened work-in-progress related to ongoing projects.

The tax expense increased to NZ$1.18 million, up from NZ$717,000, due in part to a higher profit before tax of NZ$4.30 million. Deferred tax assets rose to NZ$230,000, from NZ$167,000 in the prior year, suggesting prudent recognition of deductible temporary differences.

Outlook and audit

The directors confirmed that no significant events occurred after the reporting date that would materially impact the financial position. The accounts were audited by PricewaterhouseCoopers, which issued an unmodified audit opinion, confirming that the financial statements present a true and fair view in accordance with New Zealand equivalents to IFRS Reduced Disclosure Regime.

Conclusion

Schneider Electric IT Australia's New Zealand branch has reported a strong financial year in 2024, buoyed by maintenance service contracts and sound cost controls. While revenue from solution services declined, the company's overall profitability and cash position strengthened, reflecting operational resilience in a shifting market environment.