Jump in staff costs hit Boston Scientific profits

Boston Scientific achieved a gross profit of $101m in 2023 representing a 6% gross profit margin and this compared to a gross profit of $128m and a gross profit margin of 9% in 2022.

A $50m jump in staff costs contributed to pre-tax profits at the Irish arm of medical device manufacturer Boston Scientific last year decreasing by 28% to $72.79m (€66.3m).

New accounts filed by the Galway-registered Boston Scientific Ltd show that the firm recorded the decrease in profits despite revenues increased 10% from $1.489bn to $1.65bn for the year.

Numbers employed by the business last year increased by 555 from 5,850 to 6,405.

The increase in headcount followed Boston Scientific announcing the creation of more than 400 jobs at its Clonmel base in May 2023 after the company announced an €80m spend on the expansion of its manufacturing and Research and Development capabilities at its Co Tipperary site.

Employees based at Boston Scientific's Clonmel site manufacture medical devices that support the treatment of more than 400,000 patients globally each year.

Products created there help patients suffering from conditions such as heart disease, neurological disorders, kidney stones, and diseases of the pancreas, bile ducts, and esophagus.

Staff costs

The group's staff costs last year increased by $49.77m from $422.52m to $472.3m that included salaries rising from $364.5m to $406.2m and share-based payments increasing from $7.97m to $8.59m.

The directors for Boston Scientific Ltd state that they are satisfied with the performance of the company against its key performance indicators.

The directors said the company achieved a gross profit of $101m in 2023 representing a 6% gross profit margin and this compared to a gross profit of $128m and a gross profit margin of 9% in 2022.

The business benefited from $10.54m in other operating income which was double the $4.9m recorded under that heading in 2022.

On the group’s going concern status, the directors state that the business "has generated a significant net profit in the current year and is in a strong positive net asset position at the end of the financial period”.

Profits last year were reduced as its Research and Development spending increasing from $87.94m to $98.9m. The business’s profits also take account of non-cash depreciation costs of $47.46m.

Irish operation

Boston Scientific began operating in Ireland in 1994. The company now employs more than 6,400 people across its sites in Galway, Cork, and Clonmel.

Boston Scientific Ltd's workforce is made up of 3,716 production operatives and 2,689 in administration and management roles.

Pay to directors last year increased from $971,000 to $1.2m made up of emoluments of $880,000, $176,000 paid out under long term incentive schemes and $163,000 in aggregate gains in terms of share options.

The firm’s operating profits last year decreased by 28% to $69m and the business benefited from interest income of $3.74m resulting in the pre-tax profit of $72.79m.

The company recorded a post tax profit of $64.86m after a corporation tax charge of $7.92m.

No dividend pay-out was made last year after a dividend payout of $1.05bn in 2022.