Nestlé Ireland back in the black despite dip in turnover

Sister company Wyeth Nutritionals recorded profit increase of 105% to over $306m

The Irish arm of global food group Nestlé turned an operating profit of €950,000 in 2016. Photograph: Fabrice Coffrini/EPA Photo

The Irish arm of global food group Nestlé turned an operating profit of €950,000 in 2016. Photograph: Fabrice Coffrini/EPA Photo

 

The Irish arm of global food group Nestlé turned an operating profit of €950,000 in 2016 as turnover fell by over 6.6 per cent, according to recently filed accounts.

The accounts show the company’s profitability was a turnaround from its €3.05 million loss the previous year even as turnover fell to €98 million.

Ultimately, however, Nestlé Ireland recorded a profit after tax of €140.7 million having paid interest charges and expenses of €1.9 million after receiving €141.6 million in a dividend payment from its sister company, Wyeth Nutritionals.

Notably, the company directors paid the same amount – €141.6 million – in the form of an interim dividend to its shareholders.

A local arm of the Swiss multinational, Nestlé Ireland imports, sells, markets and distributes a range of products from confectionery to pet food and infant nutrition. In the 12-month period to the end of 2016 it employed 61 staff in Ireland and had wage and salary costs of €4.3 million.

Separately, accounts filed for Wyeth Nutritionals Ireland Limited show a turnover of $650 million (€552 million), up by more than 11 per cent due to heightened demand for infant nutrition products in greater China.

Intellectual property

Wyeth manufactures and sells infant nutrition products however, during 2016 it sold its intellectual property to a fellow group undertaking, thereby becoming a limited risk distributor.

Ultimately, the sale of its intellectual property for $1.6 billion (€1.3 billion), resulting in a profit of $102 million (€86.7 million), helped Wyeth record a profit after tax of $306.8 million (€260.7 million) – a 105 per cent increase on 2015.

The Askeaton, Co Limerick-based Wyeth employed 652 staff in 2016 with wages and salary costs of $65.4 million (€55.5 million).

Nestlé acquired Wyeth from Pfizer in an $11.85 billion (€10.1 billion) deal in 2012. The Wyeth group employed 4,000 people at that time, including around 600 at its Irish operation in Askeaton.

More recently, Wyeth paid another dividend to sister company Nestlé Ireland at the beginning of this year. The €344.1 million dividend was used by Nestlé to repay unsecured loans from a group undertaking.