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Hip replacement recall led to substantial DePuy losses
The main Irish arm of orthopaedic medical device manufacturer, DePuy recorded pre-tax losses of €3.45bn in 2018.New accounts for DePuy Ireland Unlimited show that a €1bn provision for a hip replacement product recall and associated costs contributed to the substantial losses.The €3.45bn pre-tax loss followed a pre-tax profit of €107m in 2017 - a negative swing of €3.56bn.
The company - which is owned by Johnson & Johnson - employs 837 at its Cork base and revenues in 2018 declined from €1.349bn to €1.292bn.The directors state that in August 2010, DePuy Ireland Unlimited announced a worldwide voluntary recall of certain products used in hip replacement surgery.In Ireland, about 3,300 patients received these implants, across 16 public and 14 private hospital sites nationwide.The directors state that the total provision for the global recall at the end of 2018 amounted to €1.29bn for DePuy Ireland Unlimited and this followed a provision of €492m at the end of 2017.Along with the €1bn product recall provision charged to the company's profit and loss account for 2018, a €2.66bn impairment by DePuy Ireland Unlimited in subsidiaries resulted in the pre-tax loss in 2018.
A note attached to the accounts state that the impairment occurred "due to an impairment indicator noted due to the commissioning of an independent valuation report on underlying financial assets".The directors state that "despite ongoing competitive challenges in the marketplace for orthopaedic medical devices, the directors are satisfied that they will be able to manage the company's activities to enable it continue trading profitably into the future".Staff costs at the DePuy Cork company declined by 3.6% from €78m to €75.3m.Directors' pay at the
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