Microsoft Ireland’s pretax profit rises to €2.2bn amid higher cloud demand

Pretax profits at Dublin-based Microsoft Ireland Operations Limited (MIOL) rose to $2.6 billion (€2.2bn) in the year to the end of June 2020, up from $1.9 billion, while revenue increased $9 billion as demand for cloud services fuelled growth at the tech giant.

MIOL is the Microsoft subsidiary tasked with marketing, selling and distributing hardware and software to the Europe, Middle East and Africa region, and Asia Pacific.

Accounts filed for the company showed revenue for the year was $46.7 billion, up from $37.6 billion a year earlier. About half of that came from products, with more than $23.5 billion generated by services, with $6.6 million in royalty income.

Operating profit was $662 million higher at $2.45 billion for the year.

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The latest set of accounts show the subsidiary paid tax of $342 million. That figure included $378.4 million in corporation tax, which was offset by deferred taxation of more than $21 million and over-provision in recent years.

Microsoft’s Irish operations saw growth across its businesses last year, but demand for cloud services played a central role.

While the coronavirus pandemic has hit some businesses particularly hard, the shift to working from home has accelerated enterprises' switch to cloud-based computing, and benefitted companies such as Microsoft and Amazon, who have invested heavily in their cloud business.

Expansion

Microsoft Ireland is continuing to expand despite the continued disruption from the coronavirus pandemic. Staff numbers were just below 1,900, according to the accounts, with salaries and wages costing the company a total of $224 million and total staff costs amounting to $283 million.

However, that tally does not include the 200 jobs announced in February as the tech giant expands its digital sales team. Recruitment is ongoing, with Microsoft expecting to fill the jobs by May.

Prior to that the EMEA digital sales centre employed more than 1,000 people, growing from an initial 500 when it was set up in 2017.

That followed the news of 200 jobs at Microsoft's engineering hub, located close to its campus in Leopardstown, Dublin, last November. That announcement was part of a €27 million investment at its engineering hub.