Pre-tax loss of €9.4m at HP Galway but revenues go up
THE Galway unit of Hewlett Packard (HP) plunged into the red last year in spite of an 8pc increase in revenues to $279.3m (€212m).
HP employs around 4,500 people in Ireland with most of them at their Irish headquarters in Leixlip, Co Kildare, but there are over 400 staff employed at the smaller site in Galway.
Accounts just filed with the Companies Office show that Hewlett Packard Galway recorded a pre-tax loss of $12.8m (€9.4m). It represents a $20.8m wing away from the 2011 profits at the business.
The figures show that revenues at the plant increased by $21m from $258.1m to $279.3m in the 12 months to the end of October 31, 2012.
The chief factor behind the loss was an exceptional cost of $25.1m towards additional pension payments in 2012.
Research and Development (R&D) spending is a major outlay for the business and increased by 10pc to $22.3m in Galway.
The directors' report states: "Many of these developers are focused on next generation platforms, in particular cloud computing." Numbers employed at the firm last year increased from 378 to 421 with wages and salaries increasing from $26.3m to $29.8m with share-based payments totalling $639,148.
According to the directors' report: "The company has continued to develop from its manufacturing heritage to be a campus for software business lines with strategic planning and continuous innovation by the site management team and employees driving new business offerings to replace those that have matured naturally and declined."
The report continues: "Software services business lines continue to perform well, supporting a worldwide customer base. In the coming financial year, the company will continue to look for opportunities to demonstrate the value it can deliver for Hewlett Packard businesses and projects across the globe."
On the risk and uncertainties facing the firm, the directors point to "the challenge of maintaining competitiveness in the face of rising energy and labour costs, especially in the context of comparison with other locations around the globe".