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April 30, 1987

IBM EIRE LIMPS IN WITH 28% PROFIT PLUNGE – BUT AN EXPORT SUCCESS STORY

By CBR Staff Writer

The 1986 figures from IBM (Ireland) Ltd were no brighter than those from most of the company’s bigger Country operations – but the Dublin government has every reason to feel a very warm glow indeed about the company. IBM reported pre-tax profits down a horrendous 28% at UKPIr5.8m on turnover that declined 7.2% to UKP53.7m. But the success story is IBM’s offset arrangements to compensate for the fact that almost everything it sells in Ireland is imported. Because IBM’s Country operations trumpet their export figures but take a solemn vow of silence on the levels of imports from their sister companies around Europe, it is seldom possible to calculate whether or not the company is living up to its target of being net neutral on imports and exportc within each country – but in the case of Ireland, since all the hardware sold there is imported, the picture is relatively clear. And in addition to a 54% increase in exports from its software centre operation to UKP5.3m, IBM’s Procurement Acquisitions programme – subassemblies and equipment bought from Irish companies to serve its manufacturing operations in other parts of Europe, reportedly amounted to UKP49m. Add to that the software exports and it just tops the business done in Ireland. Take into account the fact that there must be an element of local value added to the systems sold in Ireland, and there is every reason for Irish eyes to smile on IBM: its Dublin operation is being a very good corporate citizen indeed.

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