Profit slips at Alcon's Cork-based Irish arm as sales increase

Sales at the Irish division of Novartis eyecare business Alcon jumped more than 5 per cent to €41.78 million last year. However, profit before tax fell by 4 per cent to €3.7 million.

Alcon Laboratories Ireland, which is based in Cork, manufactures intraocular lenses. These are used to replace natural lenses removed during cataract surgery.

The plant was established in 1991 but acquired by Alcon in 2000. All its product is sold to its parent company.

Cost-control measures

In accounts filed at the Companies Office, the directors state that local management has implemented cost-control measures to mitigate the risk of the plant becoming uncompetitive.

They describe the performance in 2015 as “strong” due to increased demand for its lenses.

“The main driver for the increase in turnover is the increased production at the site to meet an increase in demand for the product,” they state.

Operating profits – down 5 per cent to €3.94 million – fell primarily because of project expenditure, the directors add.

Alcon Ireland is continuing to increase manufacturing capacity and spent €5.9 million on such projects in 2015, up from €4.7 million the previous year. Alcon has also acquired a site beside its current plant to allow for future growth, they said.

Staff costs

Staff numbers fells to 355 last year from 367 in 2014, with staff costs reduced too €20.62 million from €21 million. Directors “emoluments” were more than halved to €350,000 from €732,000.

Alcon’s Irish division, which paid a dividend of €2.4 million to its parent in 2014, has decided against any dividend payment this year.

Novartis is struggling globally to counter a slump in eyecare sales. Its Alcon division has been hurt by slumping sales of its surgical equipment and a disappointing intraocular lens business, as well as patent expirations on its drugs.

Novartis, which is facing patent expiry on $3 billion worth of drug sales this year, replaced the head of Alcon after disappointing 2015 results but the division continues to struggle.

Alcon itself was acquired by Novartis from Nestlé between 2008 and 2010. – (Additional reporting: Reuters)