Software sales boost profits at Oracle by over 50%

THE main Irish subsidiary of US software giant Oracle increased its pre-tax profits by 51% to €707 million in the year to the end of May last year.

Accounts just filed by Oracle EMEA to the Companies Office, show that the Dublin-based company increased its turnover by 17.5% from €3.1 billion to €3.7bn.

The filings show the company, which produces and sells computer software to the European market, paid a dividend of €250m to its US parent last year.

The accounts also show that the company paid €86m in corporation tax during the period.

The directors’ report attached to the accounts state: “Trading results continued to be strong and the directors are confident that the company will continue to trade successfully in future periods.”

The filings show that the company had accumulated profits of €737m at the end of May 2008.

Globally, Oracle, headquartered in California, had sales totalling $22.4bn (€16.9bn) in the 2008 fiscal year.

And last month the corporation agreed to purchase technology company Sun Microsystems for $7.4bn (€5.5bn).

The accounts show that while the Irish unit’s Rest of Europe business increased by 19% or €608m to €3.6bn in 2008, the company’s turnover from its Irish market declined by 37% from €127m to €80m in 2008.

Oracle’s Irish business represented 2% of Oracle EMEA’s turnover in 2008.

The accounts show that the Oracle EMEA operating profit increased by 44% or €224m from €502m to €726m and the company’s pre-tax profits benefited from more than a doubling of bank interest payments received of €46m. The company’s interest payments also increased by 20% to €65m.

The directors state the company expects “its software business revenues will continue to increase, which should allow us to improve margins and to make investments in research and development”.

The filings show that €1.3bn of the company’s income came from licences from the company’s software products, €2bn from support services and ‘other’ revenues accounted for €389 million.

The filings show that the company’s ‘cost of sales’ increased from €1.4bn to €1.6bn, while the company’s distribution costs increased from €968m to €1.1bn.

The accounts also confirm that the company, based in Dublin’s East Point Business Park, employed 843 people in 2008, with the breakdown showing that 283 were engaged in sales and marketing, 234 in telesales support, 155 in finance and administration, 105 in manufacturing and development and 66 in translation service.

The accounts show that the company paid €59m in staff costs in 2008, down €2m on the 2007 figure.

The accounts also show that at the end of May 2008, the company had received grants totalling €8.5m from the IDA, principally in relation to the creation of jobs.

Oracle was founded in 1977 by Larry Ellison, who remains the corporation’s chief executive.

Around the world, the company employs 75,000 people.