The Irish business of games giant Hasbro has reported increased profits for 2014 despite a substantial fall in sales.
The US firm's Waterford manufacturing plant makes games largely for the group's European market. It also acts as a contract manufacturer providing services for other smaller games companies.
Sales last year slid 15 per cent to €16.74 million from €19.7 million a year earlier, according to accounts. But the company still reported profit before tax of €1.34 million, up almost 10 per cent on the previous year.
The 2013 sales figure was itself dramatically up on the €15.9 million in sales secured in 2012.
Accumulated losses
Despite the improved profitability of the plant, accumulated losses jumped almost 50 per cent to €13.75 million as the company struggles with a deficit in its defined benefit pension schemes.
Hasbro operates two defined-benefit schemes for Irish staff. However, a decision was made to close both schemes to future accrual from the end of 2013.
An independent actuarial assessment of the schemes conducted for the company shows although the value of the pension assets rose more than 14 per cent last year to €52.7 million, they cover just 85.6 per cent of the benefits built up by Hasbro staff.
As a result the net deficit in the schemes rose to €7.7 million last year from €2.35 million in 2013, leading to a balance sheet actuarial loss of €6.5 million.
In their report, the group’s Irish directors said the performance was “in line with expectations”. They noted the increasing global competition in the contract manufacturing of toys and games, as well as the impact of the euro/dollar exchange rate, before stating their confidence that the company had “adequate financial resources to continue in operational existence for the foreseeable future”.
Hasbro, along with other major games companies is focusing increasingly on toys based on movie franchises, which have been driving sales as more traditional toys fall out of favour.
The company has been operating in Waterford since 1977. According to its website, it manufactures about 17 million games a year and employs on average 245 people. That number increases in peak season ahead of the Christmas market, according to Hasbro.
The Irish business is a subsidiary of Netherlands-based Hasbro International Holdings, of which the US group is the ultimate parent.
