€39m pre-tax loss for Irish arm of Oracle

The main Irish subsidiary of US software and hardware giant Oracle last year recorded a pre-tax loss of €39.1m in spite of increasing revenues by 29% to €5.57bn.

Accounts filed with the Companies Office by Oracle EMEA Ltd show the Dublin-based company recorded the pre-tax loss of €39m after recording a pre-tax profit of €133.4m in 2010.

The firm increased revenues from €4.3bn to €5.5bn in the 12 months to the end of May last year.

The filings confirm that Oracle, which produces and sells computer hardware and software for the European market, last year paid a dividend to its parent company of €200m.

The revenues recorded by the Irish unit accounted for 19% of Oracle’s global revenues of $35.6bn (€29.2bn) last year, a 33% increase on 2010 revenues.

According to the directors’ report, “the trading results of the company continued to be strong with a 29% growth in turnover. The directors acknowledge that the company incurred a loss in the current year and are confident that the company will continue to trade successfully and return to profitability in future periods.”

The report states that “a significant element of the growth was attributable to sales of hardware systems products and hardware systems support, arising from the acquisition of Microsystems. Additionally, there was continued growth in our software license updates and product support business due to a further increase in our support contract base and high renewal rates.”

The directors attribute the negative swing of €172m to an increase in cost of sales. The report states: “This reflects an increase in the value of intellectual property which is procured by the company.”

After the dividend pay-out, the filings show Oracle had a shareholders’ deficit of €29.9m.

The accounts show the Irish unit recorded an operating loss of €43m after showing an operating profit of €131.4m in 2010.

The company’s losses were reduced by net interest payments of €3.9m.

Oracle’s cost of sales increased from €2.7bn to €3.7bn, while distribution costs rose from €1.22bn

The firm paid tax last year totalling €38.6m.

Based in Dublin’s East Point Business Park, Oracle employed 1,026 people at the end of May 2011.

The breakdown shows there were 583 in sales and marketing; 173 in finance and administration; 202 in manufacturing and development; and 68 in product localisation and translation service.

Oracle paid €76.2m in staff costs in 2011, a rise of €7.2m on 2010.

The firm received a capital contribution of $2.5bn from its parent, Oracle EMEA Holdings.