Profits down at Irish unit of pharma giant Servier

Pre-tax profits at the main Irish unit of French pharma giant Servier last year decreased by 23% to €23.4m in spite of a sharp increase in revenues.

Accounts filed by Servier (Ireland) Industries Ltd, show the Co Wicklow-based group sustained the drop in profits as revenues climbed by 29% from €342.6m to €443.4m in the 12 months to the end of September last.

Employment at the group’s Arklow plant – subject of a €47m investment two years ago — increased from 375 to 392.

The directors state: “During the year, sales increased significantly from the previous year. This increase was driven by increased production as a result of additional production facilities available to the group and also as a result of the development of markets in the Middle East.”

The figures show that the directors approved a dividend payout of €20m last year, following a dividend payout of €15m in 2010.

On the firm’s future developments, the directors state: “The group expects to increase its sales levels and further improve its financial performance in the coming year with sales to new markets, such as Romania, Bulgaria and South America.”

The figures show that after the post-tax profits of €20m and dividend payout, the group’s accumulated profits increased marginally to €185.54m.

The group’s total shareholder funds last year stood at €204.3m, including €17m in cash.

The filings show that in spite of the increase in employees to 392, staff costs at the firm last year dipped from €21.9m to €19.3m.

Emoluments to directors remained at €272,300. The figures show that the profits take account of non-cash depreciation costs of €8.9m. The firm’s cost of sales last year increased from €261.4m to €334.7m with operating expenses increasing from €50.9m to €85.7m. The firm’s operating profits decreased by 24% from €30.2m to €22.8m.

Earlier this year, Servier’s Arklow site received a boost following the European Medicines Agency giving approval for Servier’s drug, Procoralan, to treat patients suffering from chronic heart failure. The drug had already been used to treat patients with angina.

Servier employs 20,000 worldwide and last year had global revenues of €3.9bn, with 25% of its turnover invested in research and development.