Profits at Irish subsidiary of Boston Scientific down 28%
Firm employed over 4,077 in Ireland last year, paying total salaries of $216.5m
The Boston Scientific plant in Galway. Photograph: Joe O'Shaughnessy.
Pre-tax profits at the Irish subsidiary of Boston Scientific fell by 28 per cent last year to $685 million (€580 million).
The medical-device manufacturer is one of the largest companies in Ireland, employing more than 4,000 people at sites in Galway, Cork and Clonmel.
Newly filed accounts show that the company’s sales revenue increased by 9 per cent to almost $3.5 billion in 2016, but the cost of sales also increased by just over 30 per cent during the same period.
This resulted in the firm’s gross-profit margin falling to 42 per cent last year compared with 51 per cent in 2015, and a $267 million reduction in pre-tax profits for the financial year.
In their report, the company’s directors said they were satisfied with the performance of the business to date.
“The company is engaged in a number of initiatives aimed at growing its gross and operating margin,” stated the report.
It attributed the decrease in gross profit margin to lower margins earned by the company in respect of products that had been purchased from its manufacturing plant in Costa Rica.
The decrease was also driven by increased inter-company charges and expenditure on research and development during 2016, the directors noted.
Boston Scientific employed an average of 4,077 people in Ireland last year, paying total salaries of $216.5 million. The company also engaged 463 agency staff on temporary contracts.
A total of $543 million was spent on research and development by the medical-device manufacturer last year, representing an increase of 13 per cent compared to 2015.
The company paid corporation tax of $8.2 million after adjustments in respect of 2016, compared with $15.3 million during the previous accounting period.
No dividend was paid to the firm’s parent company, Boston Scientific Group, last year. This company is incorporated in Ireland but has its principal place of residence in the Netherlands.
In 2015, a dividend of almost $283 million was paid to the parent company.