Boston Scientific records pre-tax profits of €282.7m

THE IRISH business of Boston Scientific and a number of overseas subsidiaries recorded pre-tax profits last year of $381 million (€282.7 million) after revenues topped $5.2 billion (€3.9 billion).

The leading US medical device manufacturer is one of the largest companies in Ireland, employing more than 4,500 people here.

According to accounts for BSC International Holding Ltd and Subsidiaries just filed with the Companies Office, the group returned to profit after increasing revenues by 9 per cent to $5.2 billion in the year to the end of December last.

The holding company’s registered office is at Ballybrit Business Park, Galway, and it also includes the performance of a number of overseas subsidiaries.

The revenues booked in Ireland account for 67 per cent of Boston Scientific’s global revenues of $7.8 billion (€5.8 billion) last year.

The pre-tax profit recorded last year comes after the company recorded a pre-tax loss of $1.067 billion (€800 million) in 2009. This was largely attributable to exceptional administrative costs of $1.074 billion (€803 million).

The 2010 profits also take account non-cash costs of amortisation of intangible fixed assets of $415.4 million (€310 million) and depreciation of fixed assets of $70.9 million (€53 million), resulting in group earnings before interest and tax last year amounting to $867 million (€647 million).

The figures show that the group made an operating profit of $357 million (€267 million) and made interest payments of $146.3 million (€109 million). Profits were boosted by a $158.6 million (€118 million) “milestone payment” relating to the sale of the group’s vascular intervention and endovascular business in 2006.

The directors’ report says: “The increase in net sales is primarily due to an increase in inter-company sales to entities outside the group structure in 2010. Third-party sales have remained relatively consistent with that of the prior year”.

Gross margin fell from 58 per cent in 2009 to 50 per cent in 2010. “The decrease is due to both the increase in cost of sales and a shift in product sales mix to lower margin product in 2010 as compared to 2009,” the directors add.

The filings show that the numbers employed by the group increased marginally last year from 10,555 to 10,975 with payroll costs decreasing by 4.5 per cent from $881.7 million (€658 million) to $841.2 million (€628 million).

Boston Scientific company paid $58.8 million (€44 million) in taxes last year compared to $41.7 million (€31 million) in 2009. The accounts show that four of the holding company’s Irish subsidiaries received grants from IDA Ireland totalling €26 million (€19.4 million) last year.