Pretax profits down at Irish unit of pharma giant Abbott

PRETAX PROFITS at the main Irish arm of medical and pharmaceutical product giant Abbott last year fell to €240.1 million, new figures show.

Accounts just filed by US-owned Abbott Laboratories Vascular Enterprises (ALVE) Ltd with the Companies Office, show that pretax profit dropped after a fall in revenues and royalty income.

The figures show that the Dublin-registered company’s revenues were 6 per cent lower at €258.4 million in the 13 months to the end of 2010 at a time when the cost of sales rose from €224.4 million to €265.7 million.

The prior year results were for a 12-month period.

Net royalty income totalling €243.9 million was substantially lower than in 2009.

The company’s performance was negatively impacted by Abbott last year (2011) resolving prior international and US tax positions resulting in the company reimbursing an affiliate company €314.5 million.

The accounts state that the subsequent event has been reflected in the 2010 financial statements with €251.9 million as a royalty expense, €37.7 million as a reduction in revenue, €13.6 million reflected as an interest expense and €11.3 million as an unrealised foreign exchange loss.

Directors said in their report that they “anticipate the company trading position will continue to improve in the future”.

The company last year paid a dividend of €7 million that had been declared in 2009. No dividend was declared last year.

Abbott is involved in a range of businesses ranging from medical devices to nutritional products.

Three of the company’s subsidiaries are Irish-based with others located in the Netherlands, Belgium, Bermuda and Costa Rica.

Last year, the company’s research and development expense totalled €160.5 million compared to €25.9 million in 2009.

Of this, €105 million is prepaid for RD scheduled to be carried out in 2011 as part of a RD services agreement with a connected company.

Globally, Abbott recorded revenues of $35.2 billion in 2010, when it employed 90,000 people in 100 facilities worldwide.