Meta Ireland's pre-tax profits exceed €1 billion

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Meta Ireland's Pre-Tax Profits Exceed €1 Billion Meta Ireland's Pre-Tax Profits Exceed €1 Billion
The latest accounts come on the back of record revenues. Photo: PA.
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Gordon Deegan

Pre-tax profits at the social media giant that operates Facebook last year increased by 33pc to €1.184 billion on the back of record revenues.

New accounts show that Meta Platforms Ireland Ltd — formerly Facebook Ireland Ltd — enjoyed the surge in profits as revenues increased by 29pc or €11.7 billion to €52.3 billion last year — more than average of €1 billion per week in revenues.

However, the firm’s post tax profits of €484.83 million were 22pc down on 2020 after the company was hit with a corporation tax bill of €699.3 million.

A large proportion of the corporation tax bill arose from Facebook this year paying €212.3 million to settle tax matters.

A note states: "Subsequent to the reporting period, the company agreed to the resolution of certain tax matters with tax authorities relating to prior tax years.

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"As a result a tax liability and corresponding income tax expense of €212.3 million has been recognised in respect of these years and other prior tax years."

The firm paid out €34.5 million under a similar heading last year.

The €212.3 million paid out to settle tax matters this year is in addition to the €485.89 million corporation tax bill on ordinary activities for 2021.

In addition to the €212.3 million tax expense, the note adds that in the current year, a related interest liability of expense of €60 million was recognised in relation to these tax matters.

The accounts also disclose that the company made provision for an additional €1.96 billion last year to cover regulatory compliance matters which brings to a total of €3 billion under the heading of ‘regulatory compliance provisions’.

A note attached states that the provisions "relate to amounts identified for administrative fines arising from various ongoing regulatory compliance investigations or decisions by relevant data protection supervisory authorities".

The note also states that "the amount of any final fines is uncertain and could differ from the amount provided as a number of uncertainties exist. Where a regulatory decision has been made, the final fine may be impacted by any potential appeal".

The note also states that the provisions recorded “represent the best estimate of the expenditure required to discharge these obligations and are within a range of reasonably possible outcomes that exist”.

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The note points out that the best estimate "is based on the advice from outside legal counsel, regulatory correspondence received to date, relevant mitigating factors, comparison with similar matters and other factors".

Subsequent to the end of last December, the accounts also reveal the firm declared and paid dividends of $3.4 billion to its parent company, Facebook International Operations Limited.

On the surge in revenues, the directors state that the increase was attributable to growth in advertising revenue from third-party customers.

The accounts were signed off before Meta announced global job losses, with the firm telling Government here earlier this month of roughly 350 jobs to be lost at its Irish operation.

The directors state that the company continued to grow in 2021 with average headcount increased by 9pc or 193 from 2,247 to 2,440 in 2021.

The company’s staff costs last year increased by 12.5pc from €377.79 million to €425 million. The staff costs included salary costs of €276.45 million and shared based payments of €80 million.

Directors shared emoluments of €1.8 million and an additional €3.6 million in long term incentive scheme payments.

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The profit last year takes account of non-cash depreciation costs of €66.2 million and research and development costs of €131.74 million.

At the end of last year, the firm had shareholder funds of €3.46 billion that included accumulated profits of €2.09 billion. The firm’s cash funds increased from €3.4 billion to €6 billion.

 

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