Cork-based Apple Operations see profits jump

PRE-TAX profits at the main Irish subsidiary of iPhone maker, Apple, last year increased by 2% to $69.3bn (€63.4bn).

The pre-tax profits recorded by Cork-based Apple Operations International Ltd and subsidiaries equate to daily pre-tax profits of $189.87m for the 12 months to the end of September 24, 2022.

The business recorded an increase in pre-tax profit as revenues rose by $11.69bn or 5.5% from $211.05bn to $222.75bn for the 12-month period. AOI is registered at the company’s Hollyhill campus in Cork and covers most of Apple’s non-US subsidiaries.

The company acts as a holding company for a number of Apple subsidiaries. It manufactures and develops everything from the company’s iPhone and iPad products to Mac computers. The directors state that the group has international operations with sales outside Ireland representing a majority of the group’s net sales.

The new consolidated accounts show that the business last year paid dividends of $20.7bn to Apple Inc and this was down on the $25.3 billion dividend payout in 2021. The accounts state that the dividends are fully subject to US tax.

AOI incurred a corporation tax charge of $11.08bn last year across a number of countries where Apple operates and that figure excludes US-based taxes. The figure was down marginally on the $11.57bn tax charge for 2021.

The firm paid corporation tax of $7.69bn. The business’s total provision for corporation tax of $11.08bn takes account of deferred tax of $3.29bn.

The €7.69bn cash paid in corporation tax in fiscal 2022 is a 73% increase on the €4.44bn cash paid in corporation tax by the business in the prior year.

The accounts don’t disclose corporate tax paid in Ireland but state that a 12.5% corporate tax charge would have resulted in corporation taxes of $8.66bn.

The filing does not say where the tax was paid but the greatest share is likely to have been paid here, where the company is based. Underlining the importance of Apple’s operation to the State’s corporation tax take, the State last year received total corporation tax receipts of €22.6bn, 48% or €7.3bn ahead of the previous year’s total.

The accounts refer to the Apple and Irish Government’s successful appeals against the European Commission decision six years ago that the iPhone maker owed Revenue €13.1bn in back taxes, plus interest of €1.2bn.

In July 2020, Europe’s second-highest court ruled that the Government didn’t give Apple any State Aid and the accounts refer to the European Commission appealing that decision to the European Court of Justice.

A note attached to the accounts states that Apple may request approval from the Irish Minister for Finance “to reduce the recovery amount for certain taxes paid to other countries”. The note states that as of September 24 last, the adjusted recovery amount was €12.7 billion, excluding interest.

The €12.7bn plus interest is funded into escrow where it will remain restricted from general use pending the conclusion of all legal proceedings.

AOI last year recorded post-tax profits of $58.22bn. Numbers employed at AOI and subsidiaries last year totalled 56,639 - a 4,076 increase on the 52,563 employed in September 2021. Some 6,000 of those employees are based in Ireland.

Staff costs totalled $6.33bn and that included share-based compensation of $1.39bn.

The company’s cost of sales last year totalled $126.29bn resulting in a gross profit of $96.46bn. AOI’s selling, general and administrative expenses last year totalled $11.38bn. The group’s Research and Development costs last year totalled $15.5bn compared to $12.4bn in 2021.

AOI’s shareholder funds at the end of September last amounted to $97.64bn compared to $58.77bn at the end of September 2021. The group’s cash funds increased from $16.8bn to $17.48bn.