Oracle’s Irish unit in the red on higher costs

The main Irish subsidiary of US technology giant Oracle went into the red last year in spite of revenues increasing by 8% to €8.7bn.

New figures lodged by Oracle EMEA Ltd to the Companies Office show the firm recorded a pre-tax loss of €10m compared with a profit of €109m in 2015.

The directors stated the company suffered an operating loss, but that they expected “the company will continue to trade successfully and return to profitability in future periods”.

The loss was due to an increase in both distribution costs and administration expenses.

They state the increases were driven by an adverse foreign exchange impact, primarily to do with fluctuations experienced on the Russian ruble, and increases in certain provisions affecting the European, Middle East and African region.

The firm’s principal activities are the manufacture and sale of computer hardware and software products, as well the associated translation, finance and marketing services.

The revenues generated by the Irish arm represent 25.5% of Oracle’s global revenues of almost €349bn in the year to the end May.

The directors’ report reveals “in fiscal 2016 Oracle EMEA Ltd invested €41m in research and development to enhance existing and develop new technologies”.

The filings show the firm’s tax liability for the year was €32m, compared with €39m in 2015.

The tax bill included Irish corporation tax of €3.8m and its foreign tax liability of €44m.

Timing differences and adjustments reduced the tax bill to €32.56m.

On the firm’s future developments, the directors stated the company intends to continue operating in the areas of software and cloud, hardware systems and services business, consolidating recent acquisitions and to increase profitability.

The firm’s shareholder funds at the end of May last year stood at €2.2bn with the company’s cash pile increasing marginally to €756m.

Staff numbers increased from 1,282 to 1,471. It has 1,034 people employed in sales and marketing, as well as 165 people in manufacturing and software development and 203 people working in finance and administration.

Staff costs increased from €104.5m to €132m.