Amazon’s main Irish unit delivered record profits last year

Profits at tech giant Amazon’s main Irish unit more than tripled last year, but staff numbers were cut by almost a quarter as it ceased research and development activity, its latest accounts show.

Amazon Data Services Ireland, which operates several data hub facilities as its principal activity, has filed accounts for the year ended December 31st, 2021, with the companies office.

The documents show the company achieved a profit before tax of €67.2 million, which was more than double the €28.5 million achieved the year before.

The unit recorded a profit after tax of €51.5 million, which was more than three times the €15.9 million in 2020. That was after adjusting for a tax charge of €15.7 million, which was up from €12.7 million a year earlier.

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Amazon said its “key performance indicator” was administrative expenses, which increased from €2.6 billion to €3.6 billion.

The company said the increase was “in line with expectations” primarily due to a rise in data centre operational expenses.

These were partially offset by reduced headcount costs owing to the previous year’s research and development activity being transferred to another group undertaking on October 1st.

The accounts show the average number of employees during the year was 1,313, which was down by almost a quarter on the 1,747 employed previously.

The Irish unit spent €104.2 million on wages and salaries, which represented a substantial saving on the €158.9 million of the previous year. These figures suggest the average salary at the Irish unit is just under €80,000.

Total staff costs, including pensions and share-based payments, amounted to €138.4 million, which was down from €214.6 million.

Turnover increased to €3.7 billion from €2.6 billion. No dividend was proposed for the year.

The accounts also show that the company acquired a 100 per cent interest in the ordinary shares of Bay Farms during the year, a company incorporated in Ireland.

Merger

A merger was effected between the two groups on April 1st whereby Amazon assumed all assets and liabilities of Bay Farms with no gain or loss arising. At the end of the year, the company’s investment in the subsidiary ceased to exist.

The accounts note that the Irish unit is a subsidiary of a Luxembourg entity and that the ultimate parent company is Amazon.com in the United States.

Separately, accounts for Amazon Ireland Support Services Ltd show that its turnover rose to €223 million in the 12 months to the end of December 2021 from €194 million a year earlier. The company recorded a loss after tax of €9.7 million, up from a loss of just under €6 million in 2020.

The company provides customer services, logistics and support services to Amazon group companies, according to the accounts. The documents note that on December 6th, 2021, a new subsidiary was formed – Amazon DC Ireland Holding Ltd – with the support services unit contributing its interest in another related company – Amazon Development Centre Ireland Ltd – to the new subsidiary.

The support services unit had 1,902 staff during the year and its total wages and salaries bill amounted to €72.5 million – an average of just more than €38,000 per employee.

Accounts for another Amazon unit in the Republic – Amazon Development Centre Ireland Ltd – show that turnover rose to €179 million last year, up from €42 million in 2020. It made an after-tax loss of €20.2 million, up from €3.3 million previously.

This entity provides contract research and development services to group companies. The company had 1,158 employees, who received €129 million in wages and salaries. That equates to an average of just more than €112,000 per employee. On January 1st this year the entire share capital of this unit was acquired by Amazon.com Sales Inc, with a registered address in Seattle in Washington state.

Amazon was contacted for comment in relation to its accounts.