Cork’s Stryker profit falls

Pre-tax profits at the Irish arm of US medical device manufacturer Stryker last year fell sharply to €59.86m.

Revenues at the firm which is a large employer in Cork fell 38% to €271m, according to accounts.

According to the directors’ report, “turnover decreased by 38% during the year primarily due to the fact that the company operated as a contract manufacturer for the full year of 2015 but only for three months of 2014”.

Numbers employed by the firm last year rose from 927 to 939, with staff costs rising from over €62.9m to €70.7m. According to a note attached to the accounts, Stryker received an insurance payout of €24.82m after a product recall of modular-neck hip stems.

“Turnover for the company in the next financial year is expected to be in line with that achieved in the current year.

"This decrease was as a result of the move to contract manufacturing as well as an exceptional gain in the prior year of €450m predominantly related to the gain on the sale of intellectual property of €499.9m and an exceptional charge in relation to the ABG II product recall of €49.52m,” the directors stated.

The accounts disclose it has received grants of €6.1m from the IDA “which may be revoked, cancelled or abated in certain circumstances”.

The directors state that cost of sales has remained relatively fixed during the year and operating costs have fallen following a reduction in research costs.

The report adds the company continues to invest heavily. It incurred research and development (R&D) costs of €15.9m, net of R&D tax credits of €3.3m.