Boston Scientific holding company in €752m loss
Accounts just filed by ‘BSC International Holding Ltd and Subsidiaries’ to the Companies Registration Office show that the company plunged into the red last year after recording pre-tax profits of $899.4m in 2008.
The leading US medical device manufacturer is one of the largest companies in Ireland, employing more than 4,500 people here.
Earlier this year, Boston Scientific announced that it was reducing its workforce at its Ballybrit plant in Galway by 175.
The Irish-based holding company’s sales of $4.8bn last year represent 59% of Boston Scientific’s worldwide revenues in 2009 of $8.1billion.
The company’s registered office is at Ballybrit Business Park, Galway and the filings show that the chief factor behind the company’s losses last year was $991 million paid out in relation to rulings and settlements of lawsuits that the Boston Scientific Group were involved in.
This follows a payout of $544.7m under the same heading in 2008.
The $991m payout last year resulted in the company recording an operating loss of $812.2m compared to an operating profit of $422.6m in 2008.
The accounts show that the company’s profits were also hit by interest payments of $257m relating in part to financing the company’s $27bn acquisition of the Guidant Corporation in 2006. The holding company and subsidiaries benefited from $811m received from the sale of its cardiac and vascular surgery in 2008 and the receipt of a milestone payment associated with the sale of its vascular intervention and endovascular solutions. The company received no such benefits last year.
The accounts show that the company paid $41.7m in taxes last year compared to $111.6m in 2008.
According to the directors’ report, the directors “are satisfied with the performance of the group to date”.
They state that the decrease in net sales is “primarily due to a decrease in intercompany sales to entities outside the group structure in 2009.
Third party sales have remained relatively consistent with that of the prior year”.
The losses last year reduced the company’s accumulated profits to $1.8bn.
In a post balance sheet event, the directors confirm that in the first quarter of 2010, the group received a milestone payment of $250m associated with the sale of its vascular intervention and endovascular solutions business to a third party in 2006.
The numbers employed by Boston Scientific in Ireland account for around 45% of the 10,555 people employed by the ‘BSC International Holding Ltd and Subsidiaries’.
The overall wage bill for the company’s workforce last year came to $881.7m.
Eight of BSC International Holding Ltd and Subsidiaries are based in Ireland, though there is no breakdown provided for the performance of the BSC’s Irish subsidiaries.
The losses last year take into account $418.5m in amortisation of intangible fixed assets, $81.7m on depreciation of tangible fixed assets; $71m in foreign exchange loss; a loss of $9.4m on the sale of tangible fixed assets and the writing off of $6.3m on tangible fixed assets.
Last year, the company spent $512.3m on research and development.
The holding company’s subsidiaries are based in Ireland, Europe, Asia, Africa and Central and South America.
No dividend was paid last year.
The accounts show that four of the holding company’s Irish subsidiaries received grants from the Industrial Development Agency (IDA) totalling €28m last year and this followed grants of €35m in 2008.
The accounts state these grants “may be revoked, cancelled or abated in certain circumstances”.
Worldwide, Boston Scientific employs 25,000 people.
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