Local technology stocks traded at the stock exchange were not spared by the slowdown of the economy in 2002, which affected the overall performance of the information technology (IT) industry.

Although many of the local tech stocks had managed to post gains others were not lucky enough to recover due to the downtrend of business, weak industry demand and tight economic situation.

One of the gainers, SPI Technologies, Inc. reported a significant revenue improvement in all its business units with a 50 percent growth in consolidated sale sin the first nine months of 2002 compared to 2001.

The company’s earnings before income tax and depreciation grew by 161 percent while operating income increased more than 20 times in 2002.

This was attributed to SPI’s sustained revenue and profit growth of its business process outsourcing unit and the profitability of its call center business in the third quarter.

SPI posted a consolidated operating income of P180 million and net income of P125 million for the first nine months of 2002.

This represents a major improvement over the net loss of P50 million in 2001, which was mainly due to the ramp up of the call center business that started operations in the second half of 2000.

Its business process outsourcing (BPO) services grew by 27 percent to P1.1 billion with gross profit growing by 20 percent to P456 million and operating income of P217 million up by 33 percent. SPI’s net income more than doubled to P187 million from P90 million in 2001.

The company’s call center business more than doubled its revenues to P557 million in the first three quarters of 2002 from P244 million in 2001.

SPI’s revenue increases posted by all business units led by call centers, resulted in growth of 50 percent for the first nine months of 2002. Content conversion was the highest sales contributor followed by call centers and litigation support.

iVantage Corporation reported a modest growth in total revenues of P186.1 million in the first nine months of 2002, up by P11.8 million due to the increase in money transfer service.

The growth in money transfer business was attributed to the systematic rolling out of full services in certain locations and the expansion of delivery and payment network.

Yehey!, a subsidiary of iVantage has launched its payment gateway system and the expansion of its tenancy. Other investments in IT-based units were doing well in terms of hardware, computer systems and software sales.

In the software application and services, SQL*Wizard, Inc., the premier business partner of Oracle Philippines and an Oracle Approved Education Provider in the Philippines, managed to post a modest growth of 9 percent to P22.8 million in the third quarter of 2002 despite the slowdown in Oracle license sales.

SQL attributed the modest earning was mainly due to the sustained growth in consulting services during the period as well as the license sales of Phoenix, a general insurance system.

The turnaround in SQL’s training business and the revenues generated by a new line of business called Business Online also contributed to the third quarter 2002 revenues and performance.

Its Oracle license sales dropped significantly by 47 percent to P6.4 million in the third quarter of last year compared to 2001.

Of the total license sales of P6.4 million in the third quarter, Oracle license sales amounted to only P1.2 million only and the balance of P5.2 million or 82 percent was derived from the sale of Phoenix, SQL’s general insurance software package.

The significant decline in Oracle license sales in the third quarter of 2002 was reflective of the downturn in the license sales market.

However, SQL’s license sales of software for the first three quarters of 2002 rose 17 percent of P40.5 million compared to the P34.7 million in 2001.

In the first three quarters of 2002, Oracle license sales still account for 81 percent of the total license sales of P40.5 million and the remaining 19 percent was contributed by Phoenix software license sales.

SQL’s net income in the first three quarters of 2002 surged 268 percent to P5.2 million compared to P1.4 million in 2001. Net income in the third quarter rose by 312 percent to P2.6 million.

The substantial improvement in SQL’s net income was brought about by the sustained growth in consulting revenue, the improved license sales margin from the Phoenix General Insurance System license sales, the turnaround in training business and the incremental of business online.

Some of the local tech stocks that posted losses wee Ionics Circuits, Ajo.Net Holdings and the PhilWeb.com.

Ionics Circuits reported a consolidated net loss P64.5 million in the first three quarters of 2002, lower by P263 million compared to a net income of P199.1 million in 2001.

Its gross profit rate decreased from eight percent to two percent during the period as gross profit dropped by P603.7 million to P44.07 million in 2002.

Ionics Circuits’ subsidiaries did not perform well. Ionics EMS, Andes Ionics and Synertronix reported losses during the first nine months of 2002.

Ajo.Net Holdings has incurred a net loss of P63.62 million for its fiscal year ending June 30, 2002. As a holding company, it owns Qnet Communications, Inc., Chikka.com, Incredibly EZ Corp., Bitmicro Networks and Metropolitan Club, Inc.
PhilWeb.com has generated P0.27 million in net income on P69.8 million in operating revenues for the nine-month period in 2002, lower by about P26.1 million than in 2001.

* As published in the Manila Bulletin, p. B-12 (Infotech)