OPERATING LOSSES at the Irish arm of wireless technology manufacturer, Option Wireless increased twelvefold to €15.75 million in 2009 as revenues halved.
According to accounts just filed to the Companies Office, revenues at Option Wireless Ltd decreased by 50 per cent from €234.7 million to €115.8 million during the year to the end of December 2009.
The company’s pretax loss of €15.6 million marks a severe turnaround its fortunes, following pretax profits of €16.9 million in 2007.
Only in December 2008, the Belgian parent company announced the addition of 145 new high-quality production jobs at its Cork plant, to be created over the following three years. However, the plunge in revenues in 2009 resulted in Option Wireless putting in place a restructuring programme with the loss of 150 of the 295 jobs at the firm at the end of 2008.
The cost of funding the redundancy programme came to €4 million and contributed to the €15.6 million in pretax losses in 2009.
The figures show that during the same accounting period for 2009 in which the company announced the redundancy of the 150 workers, the company paid a €29 million dividend to its Belgian parent.
The Cork-based firm was not available to comment yesterday, however, a company spokesman last November commenting on the 2008 results confirmed that the numbers employed by the firm had since dropped to 40.
The spokesman said that the company had taken “the unfortunate steps” to reduce the number of employees “in order to survive”
According to the directors’ report accompanying the 2009 accounts, competition from Huawei and ZTE resulted in a further decline of selling prices and profit margins on USB devices.
“Option continued to invest and focus on its US presence. This has yielded positive returns in 2009 as the revenue from the US market increased to become a substantial part of Options’s overall revenues . . . Going forward, the company’s intention is to continue to invest in its US presence and partnerships.”
The directors stated that increased competition in Europe from Huawei and ZTE has resulted in “declining volumes and revenues [for Option Wireless] in a market where volumes continued to grow”.
In spite of the job losses, the directors’ report states that “global operations headquarters will remain in Cork”.
The losses incurred in 2009 along with the dividend payout reduced the company’s accumulated profits from €47.4 million to €2.7 million with cash at the company reducing from €21.5 million to €4.1 million.
In a boost to Option Wirelesss fortunes, Option’s parent late last year signed a deal with rival, Huawei Technologies to share technologies which will result in a cash injection of €27 million for the company.
