Irish-based Dell subsidiary sees profits fall on declining PC sales

Dell Products records $6.7m after-tax loss as turnover down by more than 10% last year

One of Dell’s largest Irish-based subsidiaries saw turnover tumble in the 12 months to the end of January 2016 as it fell into the red.

Newly filed accounts show Dell Products, which sells and distributes the group’s technology products in Europe, the Middle East and Asia, reported a $6.7 million after-tax loss (€6.3 million), compared with a $1.6 million profit a year earlier.

Revenues fell by 10.7 per cent, to $10.9 billion from $12.2 billion, due to a decline in demand for notebooks and desktop PCs.

Operating profits rose to $10.2 million versus $5.07 million a year earlier.

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The accounts state the principal activity of the company was the sale and distribution of Dell manufactured systems and third-party manufactured computer option products. These were sold to end customers through group companies acting as agents, and to other group companies, according to the accounts.

The company also provides ancillary operations support, supply chain and logistics management, and back office IT and finance support to other subsidiaries.

Fees and other distribution costs paid to other group companies amounted to $1.2 billion, down from $1.5 billion in the previous year.

Staff costs at Dell Products, which employed 774 people last year, declined to $62 million from $98.9 million

The net assets of the company at the end of 2016 were $101 million, as against $107 million a year earlier.

Revolving loan deal

The accounts show a $1.15 billion loan agreement with parent company Dell Global from early 2014 was replaced with a new revolving loan deal of up to $3 billion. The loan, which covers the period up to January 2019, is repayable on demand.

Dell Direct, the computer giant’s Cherrywood-based sales and support operations unit, recently reported pretax profits of €3.7 million for 2015, as against €5.03 million a year earlier. Revenues fell 10.8 per cent year-on-year, to €119 million from €133.5million.

Total comprehensive income for the unit after tax came in at €3.3 million, versus €4.48 million in the prior year. The unit employs 1,079 people.

Dell last year merged with EMC in a $67 billion deal. The combined entity employs more than 5,000 people in Ireland.

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist