Amdocs slumps into red despite revenues rising by 14%

US software company Amdocs slumped into the red last year in spite of revenues increasing by 14% to $904 million (€655.4m).

Figures returned by the Dublin-based Amdocs Software Systems (ASSL) show that the company recorded a pre-tax loss of $39.8m compared to a pre-tax profit of $20.1m in 2009.

The chief factor behind the loss was a $47.9m impairment in goodwill connected with the purchase of Changing Worlds as Amdocs state that it is envisaged that the newly acquired company will not trade profitably in the foreseeable future.

The directors agreed that it was reasonable and prudent to fully amortise the goodwill of Changing Worlds.

The Dublin-based operating centre for Amdocs employs 160 of the company’s 19,000 strong global workforce.

However, the unit accounted for 30% of the company’s global revenues of $2.98 billion in 2009.

Along with its Irish base in Dublin, Amdocs has production and operating centres in China, Cyprus, India, Israel and the US.

The figures show that the company paid a dividend of $44m to its parent last year.

The company — which has its registered office in Dublin’s Eastpoint Business Park — recorded a gross profit of $31.9m before the $47.9m goodwill impairment and $23.5m in administrative expenses were taken into account.

Amdocs is engaged in providing software and services for billing, customer relationship management, operations support systems and web portal.

In the company’s directors’ report, it states that “given the difficult economic environment, the directors feel that the company has had a satisfactory year and expect the company to continue to report satisfactory results”.

The numbers employed by the Irish unit increased from 132 to 160 with 119 engaged in production and 41 in administration.

The company’s staff costs last year increased from $16.1m to $17.9m. The accounts also show the company had accumulated losses of $59m at the end of last year. ASSL last year sustained $5.9m in foreign exchange losses; $15.4m in amortisation of intangible assets and $1.2m in depreciation.

The company’s “cost of sales” increased by 15% from $757.9m to $872.1m. The filings show that the company paid $22.6m in corporation tax last year and this followed a payment of $20m in 2008.

According to the directors, “the telecommunications industry is being transformed by continued consolidation. We believe consolidation and convergence are accelerating carriers’ needs to operate systems at significantly lower costs, and we believe that we have positioned ourselves to take advantage of these trends”.

They state: “As a result, despite the uncertainties that still exist in the market, including those associated with the consolidation in the industry, we expect continued growth in the forthcoming financial year”.