Boston Scientific holding company records €614m pretax profits in 2008

A HOLDING company for Boston Scientific’s Irish and international subsidiaries last year recorded pretax profits of $899 million (€614 million).

According to accounts just filed by BSC International Holding Ltd and Subsidiaries to the Companies’ Office, the company recorded the pre-tax profit after increasing its turnover by 4.7 per cent, from $5.2 billion to $5.4 billion, in the year to the end of December last.

The leading US medical device manufacturer is one of the largest employers in Ireland, employing more than 4,500 people here.

The Irish-based holding company’s sales represent 67 per cent of Boston Scientific’s worldwide revenues in 2008 of $8 billion.

The accounts show that the company’s operating profit last year decreased by 2 per cent from $432.6 million to $422.6 million.

The filings show that the company’s operating profits were hit by $544 million paid out last year in relation to rulings and settlements of lawsuits that the Boston Scientific Group were involved in.

The company’s profits were also hit by interest payments of $351.8 million relating, in part, to financing the company’s $27 billion acquisition of the Guidant Corporation in 2006.

However, the filings show that Boston Scientific received $811 million from the sale of its cardiac and vascular surgery products during 2008 and the receipt of a milestone payment associated with the sale of its vascular intervention and endovascular solutions to a third party in 2006 that helped push the company’s pre-tax profits to $899 million.

The $899 million pre-tax profit last year compares to a pre-tax loss of $107 million in 2007.

The accounts show that the holding company had retained profits of $2.9 billion at the end of 2008. The company’s cost of sales decreased last year from $2.4 billion to $2.3 billion.

The numbers employed by Boston Scientific in Ireland account for almost half of the 9,532 people employed by the BSC International Holding Ltd and Subsidiaries.

Earlier this year, the company announced that it was to invest €21.7 million in an RD project at its Cork plant where 1,300 people are employed. This followed two separate RD investments totalling €141 million at its Galway unit, which is the largest manufacturing site within the corporation, employing 3,000.

The filings show that the company’s staff costs last year increased by 8 per cent from $800.6 million to $865.9 million.

There is no breakdown provided for the performance of the BSC’s Irish subsidiaries.

However, arising from the holding company having its registered office at Ballybrit Business Park in Galway, the exchequer last year received $111 million in corporation taxes from Boston Scientific – the firm paid $161 million in corporation taxes in 2006 and 2007.

The holding company’s subsidiaries are based in Ireland, Europe, Asia, Africa and Central and South America.

According to the directors’ report, the directors “are satisfied with the performance of the group to date”. The directors state that the increase in net sales is primarily due to the favourable impact on currency exchange rates and that sales in the cardiovascular, endosurgery and cardiac rhythm management divisions increased on 2007. No dividend was paid.

The company’s payroll costs amounted to $744.8 million. Three of the holding company’s Irish subsidiaries have received grants to date from the Industrial Development Agency totalling €35.8 million.