SAP warns China slowdown hurting software sales
Reuters in Frankfurt
Germany’s SAP on Thursday curbed its outlook for this year software revenue, citing the effects of slowing economic growth in China and customers’ move to cloud-based services.
The business software maker said it now saw revenues from software and software-related services growing by at least 10 per cent this year, excluding exchange rate fluctuations, compared with a previous outlook for 11-13 per cent growth.
“In the short run, the reduced growth rates in China are impacting not just China but all the countries around it,” co-Chief Executive Jim Hagemann Snabe said, adding especially companies in Japan, Australia and New Zealand had grown hesitant to invest in software.
China’s GDP growth rate slowed to 7.5 percent in the second quarter - the ninth quarter in the last 10 that expansion had weakened - in a setback for companies around the world betting on a continued boom in the world’s second-biggest economy.
SAP still affirmed its outlook for this year operating profit of 5.85-5.95 billion euros (HK$59.6 billion to HK$60.6 billion) at constant currencies, up 12-14 per cent from 5.21 billion last year.