The Irish unit of US communications giant Verizon Media, which owns AOL and Yahoo, transferred its intellectual property (IP) out of Ireland and back to the US last year in a €448 million deal.
The move helped to drag the Irish unit, Verizon Media EMEA, back into profit, according to recently filed accounts, because it was also able to jettison a number of costs associated with domiciling the IP in Ireland. The US company subsequently gave the Irish unit a licence to use the patents, and Yahoo and AOL’s sales for Europe, Middle East, Africa and some Asian countries continue to be run from Dublin.
Accounts just filed for Verizon Media EMEA show its sales increased last year by 7.5 per cent to €703 million. The Dublin unit generated its revenues by selling Yahoo and AOL advertising and search services internationally.
Shift in profitability
The company recorded a dramatic shift in its profitability in 2019, however. It filed a profit just short of €70 million, compared to a €196 million loss the previous year. It attributed the turnaround to having dispensed with the need to write down the value of the now-jettisoned IP in its Irish accounts.
Its corporation tax bill would have been about €8.8 million, but the Irish unit was able to cut this to €565,000 mostly by using tax losses carried over from prior years. Despite its hefty 2019 profits in Ireland, Verizon Media EMEA still carries accumulated losses on its balance sheet of €137 million.
Verizon, which bought AOL in 2015 and subsequently merged it with Yahoo after it bought the latter in 2017, also bolstered its Irish balance sheet last year with a capital injection of about €190 million, delivered via one of the company’s units in the Netherlands, the accounts show.
Verizon operates in Ireland from a base near North Wall Quay in Dublin, and also runs a data centre on the city’s northside in Ballycoolin. The Irish arm’s accounts show that its staff numbers here rose last year to 316 from 254 in the previous 12 months. This included 126 engineers and other technical staff, and the unit’s mean average remuneration was more than €110,000 per employee.
Despite the rise in its Irish employment numbers, however, Verizon Media had to last year repay €840,000 to the State, out of IDA Ireland employment grants totalling €1.77 million, after it said it failed to meet thresholds it had agreed to for job numbers here.