Dell's Limerick plant made $16.9m operating profit in year to January

DELL’S MANUFACTURING plant in Limerick, which announced 1,900 job losses on January 8th this year, made an operating profit of just under $17 million (€11.5 million) for the 12-month period to January 30th, 2009, accounts filed at the Companies Registration Office show.

Dell Products Manufacturing, which operated the Limerick plant, made a pretax loss of almost $56 million during the same period, primarily due to an exceptional cost of $76 million related to the winding down of its operations.

The company says in the accounts that turnover decreased by 25 per cent in 2008 “due to a fall in volumes manufactured at the Limerick facility”.

However, analysis of the accounts show that turnover in fact remained broadly the same as in the previous 12-month period, at approximately $232 million.

The discrepancy arises because the accounts refer to the 12-month period from February 1st, 2008, to January 30th 2009, while the accounts for the previous period encompass 69 weeks rather than 52.

A spokeswoman for Dell said the 2008 accounts were the “first filing following the company’s incorporation”.

When averaged over a 52-week period, the figures show that operating profit at the company increased slightly in the 12-month period to January 30th last to $16.9 million, from $16.8 million in the previous calendar year.

The $76 million exceptional cost incurred by the company related to the costs of “severance, accelerated depreciation, loss on disposal of fixed assets and impairment of land and buildings”.

In January the US multi-national announced it was to lay off 1,900 staff following a decision by the company to transfer its manufacturing operations in Limerick to a new plant in Poland.

Earlier this week, Dell outsourced production at that plant to Taiwanese contract manufacturer Foxconn.

Recent results from Dell Direct, the sales and support division of Dell based in Cherrywood, Co Dublin, showed that pretax profits at the company fell by 22 per cent last year.

Results from the US last month show that the company’s overall quarterly profit fell 54 per cent due to lower-than-expected sales.

The dramatic fall in profits contrasted with the higher-than-expected preliminary earnings posted by rival Hewlett-Packard.

Last week the European Parliament approved a €21 million fund to help retrain the workers in Limerick who were affected by the job cuts.