Profits at WhatsApp Ireland soared last year after the company sharply cut the amount of cash it had set aside to deal with fines for regulatory breaches.
Accounts for 2022 filed with the Companies Registration Office show the Meta-owned unit’s profit before tax amounted to €40.8 million, which was up on the €1.3 million it generated in 2021.
After receiving a tax credit of €300,000, its after-tax profit totalled €41.1 million, up from €1.8 million a year earlier. The company said the profits had been “credited to reserves”.
The jump in profit is down to an increase in the group’s turnover, as well as a sharp drop in administrative expenses.
Turnover increased from €41 million in 2021 to €56.1 million in 2022, an increase of 37 per cent or €15.1 million.
The group said the increase in turnover was driven by a jump in service fees received from another group company as a result of an increase in business activity during the year.
Administrative expenses decreased from €39.3 million in 2021 to €15.8 million in 2022, which was a drop of €23.5 million. The fall was driven by a decrease in the group’s regulatory compliance provisions, which the company cut from €238.8 million to €193.4 million over the course of the year.
Regulatory compliance provisions are company estimates for administrative fines arising from various ongoing regulatory investigations or decisions by relevant data protection supervisory authorities.
The provisions represent the “present value of the best estimate of the expenditure required to discharge these obligations”, the company said in a note attached to the accounts.
WhatsApp Ireland is challenging the Data Protection Commissioner’s decision of January 12th to fine it €5.5 million for GDPR breaches.
The company employed an average of 80 people during the year, which was up from 69 a year earlier. Salaries, wages and bonuses came in at €9.15 million, with staff earning on average €114,412. In addition, €1.6 million was recorded as the cost of share-based payments.
The directors did not recommend payment of a dividend for the year.
Meta, the group’s parent, announced in May that it expects to cut up to 490 jobs from its Irish operation in what was the latest round of redundancies to hit the social media giant, which also owns Instagram. The anticipated job losses here would equate to about 18 per cent of roles at its Irish hub.
It comes on top of hundreds of previous job cuts at Meta, as well as losses in other tech companies such as Microsoft, Twitter and Indeed.
The cuts are being seen by the Government as part of a broader readjustment of the tech industry’s global workforce after its growth during the Covid-19 pandemic rather than being down to any specific “Irish issue”.
