Digital River posts €1.7m pretax profit

US-OWNED e-commerce firm Digital River Ireland Ltd last year returned a pretax profit in its first full year of operation in Ireland.

According to returns just made to the Companies Office, the Irish arm of Digital River returned a pretax profit of €1.7 million last year. This followed the Shannon-based company returning a loss of €821,962 in 2006.

Last year, the company increased the size of its business by 35 per cent from €32 million to €43 million over its previous accounting period for the 16 months prior to December 2006.

The company’s cost of sales increased 50 per cent from €24 million to €36 million in 2007. It commenced business operations in April 2006 to conduct sales of Digital River Inc services outside of the United States with the aim of creating 350 jobs within five years.

Located in the Shannon Free Zone’s €200 million Westpark Business Campus, Digital River provides e-commerce site development and hosting, site merchandising, multilingual customer service and a wide range of strategic marketing services.

According to a statement accompanying the accounts, the directors “expect our revenues to grow due to higher internet usage and e-commerce growth in the number of online game and consumer electronic clients we serve, expanded strategic marketing activities with a large number of clients and acquisitions”.

It said the most significant risk faced by the company was its large concentration of revenue from sales of products for just one company, software publisher Symantec Corporation.

The accounts show that Digital River Ireland last year purchased Swedish company Netgiro Systems AB for €24.8 million and confirm that at the end of December last year, it employed 90 people in the Shannon Free Zone.

The company accounts confirm that it received grants of €738,000 from Shannon Development to the end of 2007.

The accounts show that €2.8 million was paid in salaries in wages last year. The accounts show the Irish company’s directors received no remuneration last year and no dividend was paid. The company’s shareholder funds at the end of 2007 totalled €3.1 million, with €2.6 million in share capital and €573.341 of accumulated profits.