Swedish ERP provider IFS benefited in the fourth quarter from its focus on defense and infrastructure customers, as revenue rose 9% to SKr 744 million and after-tax profit more than doubled to SKr 64 million from the year-earlier quarter. But the wretched global economy caused customers to delay payments, weakening cash flow.

Revenue was also up for the year ended Dec. 31, 2008, to SKr 2.52 billion, an increase of 7%. After-tax earnings for 2008 fell 22% to SKr 95 million, largely because the company spent about SKr 24 million on a restructuring program it announced after its second quarter. For the year, earnings before interest and taxes rose 11% to SKr 154 million.

The positive results in a gloomy economic environment reflected IFS’ ongoing move away from consumer-facing industries, such as automotive and electronics. About 70% to 80% of new customers for the year came from defense, infrastructure, utilities, and what the company calls the “EPCI” segment: engineering, procurement, construction, and installation. In manufacturing, IFS focuses on process industries, such as food, and construction of equipment for large projects.

“There are still major trends that will drive long-term investment, such as the development of alternative sources of energy, demand for food and other natural resources, and military projects,” CEO Alastair Sorbie said in a statement. “Furthermore, many governments plan increased investments in infrastructure to stimulate the activity in their economies.”

On a conference call with analysts Friday, he made it clear that IFS continues to bank on homeland security and defense projects. “Governments are committed into conflict zones, which are downturn-independent,” he said.

Still, financial trouble spots emerged. Cash flow after investments weakened in the quarter to SKr 25 million from SKr 61 million in the year-earlier period. CFO Hakan Zadler told analysts on the call that “a higher degree of delayed payments from customers” in the fourth quarter compared with the year-earlier period was to blame. In response to a question from Managing Automation, Zadler said that there’s no “specific pattern” regarding which industries or geographies are withholding payment.

Meanwhile, the software provider’s move away from consumer-facing manufacturing has sprung a couple of small leaks. The huge decline in oil prices over the past year has caused a slowdown in what Sorbie described as “mid-term” oil projects. However, he said, business remains solid on long-term projects.

In a pattern similar to some of its ERP counterparts, IFS’ licensing revenue declined 2% in the quarter, to SKr 145 million, while revenue from its maintenance and support and consulting segments grew — maintenance and support by about 14% to SKr 200 million, and consulting by about 11% to SKr 391 million.

Geographically, fourth-quarter revenue gained 11% in EMEA — IFS’ largest market — to SKr 557 million; grew 9% in the Americas to SKr 96 million; and fell by about 5% in the “rest of the world” to SKr 85 million.

Sorbie conveyed a cautiously optimistic outlook to analysts, forecasting a “stable” 2009 even though he said, “Lumpiness in our business will continue.”