Irish unit's profits dip 10pc despite McAfee sales rise
Published 10/08/2016 | 02:30
Pre-tax profits at the main Irish unit of US security software maker McAfee decreased by 10pc to €22.59m last year.
Accounts just filed with the Companies Office show that pre-tax profits at the Cork-based McAfee Ireland Ltd declined in spite of revenues increasing by 11pc from €419.82m to €466.54m in the 12 months to the end of December 26th last year.
McAfee has its headquarters for its operations in Europe, the Middle East and Africa (EMEA) in Cork and numbers employed at the Irish base increased from 338 to 344 last year
In February 2011, Intel agreed to buy McAfee's global operation for $7.68bn (€5.6bn) in cash in an effort to boost its security offerings.
The directors state that the firm's gross margin decreased from 6pc to 3.5pc as McAfee's compensation arrangements were aligned with Intel transfer pricing policies.
In a shake-up of the structure of the firm, the company's parent, McAfee European Holdings Ltd, transferred its holding in the company to a fellow group company, Intel Shannon Ltd.
The figures show that McAfee Ireland recorded a gain of €5.7m arising from a disposal of McAfee (Bejing) Security Software Co Ltd to a connected firm.
The firm's spend on R&D during last year totalled €5.37m compared to €9.97m in 2014. The profit last year takes account of foreign exchange losses of €2.13m. McAfee - which established its Irish operations in 2004 - provides a series of security solutions include anti-virus, anti-spyware, anti-spam and intrusion prevention.
The profits last year resulted in the firm having accumulated profits of €69.8m with shareholder funds standing at €71.6m.
The company's cost of sales increased from €272.6m to €349m, while its administrative expenses fell from €122m to €100m. The accounts show that the company's operating profits decreased by 35pc from €25m to €16m.
The firm's interest receivable last year increased going from €184,166 to €674,198. The profit was recorded after a non-cash depreciation charge of €741,194.
An analysis of the company's turnover shows that €247m was generated in EU countries with €219m in Non-EU countries.
The figures show that the numbers employed by the firm last year increased from 338 to 344 with 119 engaged in sales and marketing; 125 in technical support with the numbers in administration at 100.
Staff costs last year reduced from €26.4m to €13.4m as a result of the company restructure.
After paying corporation tax of €696,733, the firm recorded post tax profits of €21.89m.
Remuneration for directors reduced from €728,951 to €252,075.