Profits drop 21% at Irish subsidiary of US software and hardware giant Oracle

The main Irish subsidiary of US software and hardware giant Oracle had a 21% drop in pre-tax profits to €164.4m last year in spite of revenues increasing to €7.24bn.

Accounts filed by Oracle EMEA Ltd to the Companies Office show the firm’s pre-tax profits dropped by €44.5m as revenues increased by 3% from €7.04bn to €7.246bn.

The firm sustained the slump in profit as a result mainly of non-cash amortisation of intellectual property costs increasing more than sevenfold from €35m to €251m.

The revenues recorded by the Irish unit represent 27% of Oracle’s global revenues of $37.2bn (€26.8bn) in the year to the end of May 31, 2013.

The firm’s principal activities comprise the manufacture and sale of computer hardware and software products in Europe, Middle East and Africa, together with the associated translation, finance and marketing services.

According to the directors’ report “the trading results of the company have remained strong with a 3% growth in turnover.

The company earned a profit in the current year and our expectation is that the company will continue to trade successfully and remain profitable in future periods.”

The Dublin-based firm paid a dividend on €200m in 2011 but did not pay a dividend in 2012 or in 2013. The filings show that the firm’s tax liability for the year was €11m compared with a tax bill of €59.6m in 2012.

The firm’s shareholder funds at the end of May 31, 2013, were €2.299bn with the company’s cash pile decreasing from €267.4m to €253.27m.

The numbers employed by the company increased marginally from 1,094 to 1,098 with 679 engaged in sales and marketing; 182 in manufacturing and software development; 176 in finance and administration; and 61 in product localisation and translation.

Staff costs last year increased slightly from €83.43m to €84m.

The profit last year takes account of combined non-cash depreciation and amortisation costs of €256m.

The firm’s research and development costs last year totalled €41.8m.

The firm recorded an operating profit of €161.2m and net interest receivable payments of €3.2 added to profits.

The ‘cost of sales’ increased from €4.65bn to €4.6bn, while the company’s distribution costs increased from €1.929bn to €1.953bn.

A note attached to the accounts states that “as at May 31, 2013, a number of entities with which the company does business have ongoing regulatory audits, the results of which are uncertain and could impact the company”.

“Where the outcome of such audits cannot be determined with reasonable certainty, no provision is made in the financial statements.”