Analog Devices has €3.5bn in sales via Limerick

Pre-tax profits at a Limerick-based unit of US technology firm, Analog Devices last year soared by 28% to $346.9m (€316.3m).

New accounts filed by Analog Devices International Unlimited Company (ADI) show that the firm recorded the surge in profits as revenues increased by 6.44% from $3.789bn to $4bn in the 12 months to the end of November 3rd last.

Established in Ireland in 1977, Analog employs over 1,200 people at its original and main hub in Limerick, in addition to its design facility in Cork.

The firm is a supplier to Apple of technology on the Apple's iPhone and Apple watch.

The new accounts are for the first filed by ADI since it was established in 2012 having previously filed auditors' reports to the Companies Office.

The chief factor behind the jump in pre-tax profits was $140m in dividends received during the year.

The company’s operating profits increased by 6% from $192.7m to $203.9m.

During the year, the company paid out interim dividends of $440m while subsequent to year end, the firm received dividends of $145m.

According to the directors’ report “we enter the financial year 2019 better positioned than ever to grow profitably and gain market share over the long term”.

The profits last year take account of Research and Development costs of $372.6m and combined non-cash depreciation and amortisation costs of $77m.

Underling the economic importance of the firm to Limerick, the firm’s staff costs last year increased from $143m to $151m.

The firm recorded post tax profits of $331.m after paying corporation tax of $15.24m.

Employee numbers increased from 1,201 to 1,232 and a breakdown shows 585 are engaged in manufacturing, 450 in engineering, 149 in marketing and 48 in administration.

Last year at the firm, key management personnel made up of directors and other senior employees shared remuneration of $6.45m and this was sharply down on the remuneration of $16.59m paid out in 2017.

Directors’ remuneration last year totalled €2.36m. A breakdown of the firm’s revenues show that $1bn was generated in Europe; $1.16 bn generated in ‘Rest of Asia’; $828.4m in China; $571m in the US and $372m in Japan.

The accounts also confirm the contents of a previously disclosed public filing by Analog that it is challenging an assessment by the Revenue Commissioners here for €43m ($52m) over Revenue’s finding that Analog failed to conform to OECD Transfer Pricing Guidelines in respect of the 2013 tax year.

The company states it and its parent, Analog Devices Inc intends to vigorously defend the company’s position and has filed an appeal with the Irish Tax Appeals Commission. Analog state that its transfer pricing is appropriate.

During the year as a result of a global restructuring in the Analog group, the firm acquired intellectual property valued at $20.7bn.

The firm last year received a capital contribution of $200m. Shareholder funds totalled $5.59bn.