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Corporate Profits Q1 2017-Q4 2022

Profits of corporations operating in Ireland increased by 30% in Q4 2022 to €79.8bn, when compared with Q4 2021

CSO statistical publication, , 11am
A CSO Frontier Series Output

This publication is categorised as a CSO Frontier Series Output. Particular care must be taken when interpreting the statistics in this release as it may use new methods which are under development and/or data sources which may be incomplete, for example new administrative data sources

Key Findings

  • Corporate profits increased by 30% in Quarter 4 (Q4) 2022 to €79.8bn, when compared with Q4 2021.

  • In the economic sector, Industry accounted for more than half of the corporate profits earned in Q4 2022, at €43.2bn.

  • After removing estimates of consumption of fixed capital attributed to corporations, Q4 2022 estimates of net corporate profits were €50bn.

  • Profits of foreign-owned corporations increased at a faster rate than domestically-owned corporations, with 2022 profits almost double those in 2017.

Statistician's Comment

The Central Statistics Office (CSO) has today (25 April 2023) published a Frontier Series release; Corporate Profits Q1 2017-Q4 2022.

Commenting on the release, Conor Prescott, National Accounts Income Statistician, said: "Today’s Frontier Series release gives an overview of profits earned in recent years by corporations operating in Ireland. These estimates have been produced at quarterly level using a combination of administrative data, company surveys, and indicators of activity. This allows analysis of quarterly trends, such as the increases seen in the most recent quarters of 2022. Aggregating these estimates to annual shows that corporations profited nearly €300bn in 2022.

An added benefit of deriving aggregated profits estimates from company level data is the ability to compare profits in foreign vs. Irish-owned corporations. The results show that profits in foreign-owned corporations are growing at a faster pace, with 2022 profits of €261bn representing a 98% increase over 2017. At a sector level, corporations in Industry have been the largest earners, profiting €43.2bn in Q4 2022.

Using experimental estimates of consumption of fixed capital attributed to corporations, estimates of net corporate profits have also been developed for this release. This may offer a useful picture of performance in the corporate sector as it removes the depreciation associated with fixed capital such as machinery, buildings, and intellectual property. Q4 2022 estimates of net corporate profits were €50bn."

Introduction

Corporate profits represent the income earned by all public and private companies operating in Ireland and is calculated using the same method as gross operating surplus (GOS) in national accounts. Corporate profits are a subset of total GOS that specifically measures the earnings of the non-financial and financial sectors. Similar to the accounting concept EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), these quarterly estimates provide a timely indicator of economic performance for the corporate sector.

GOS is traditionally estimated annually (see: ANA 2021 publication). This is because the primary data source is annual corporation tax filings. While quarterly GOS and Gross Mixed Income (GMI) estimates are provided in the quarterly national accounts, they are simply derived as a residual from the other Gross Domestic Product (GDP) methods. In this frontier release, quarterly estimates have been produced from the income GDP method using micro data. Specifically, using quarterly company survey data and various indicators of activity (see background notes for further information). These estimates of corporate profits serve as an initial experiment for developing quarterly estimates of GOS using the income method.

Results

Figure 1 displays estimates of corporate profits earned each quarter in the Irish economy since 2017. Table 1 also shows the values of corporate profits in this period. Corporate profits have maintained a continuous upward trend in this period. The quarterly frequency reveals larger profits earned in the most recent quarters of 2022. Profits of €79.8 billion were earned in the latest quarter Q4 2022, a 30.2% increase over Q4 of the previous year. Viewed over a longer timeframe, Q4 2022 profits represent a 52.7% increase over the pre-pandemic quarter Q4 2019.

Table 1 Gross Corporate Profits, non-seasonally adjusted

Corporate Profits
2017Q135.6477605287066
2017Q236.3025883179573
2017Q338.4745546089805
2017Q444.1618160918154
2018Q142.1590941478607
2018Q242.4394546947784
2018Q345.5644550010981
2018Q448.0441253390433
2019Q147.4870027091547
2019Q246.8498634315972
2019Q349.9780162584669
2019Q452.2507292464964
2020Q153.103388997476
2020Q252.3298737463047
2020Q358.1833765357604
2020Q454.4859394003062
2021Q162.6515872250667
2021Q263.016763008249
2021Q363.8092121484541
2021Q461.2950321681894
2022Q161.1410737479023
2022Q275.3400905480986
2022Q381.2720766338142
2022Q479.7868422933545
2020Q153103388997.476 2020Q252329873746.3047 2020Q358183376535.7604 2020Q454485939400.3062 2021Q162651587225.0667 2021Q263016763008.249 2021Q363809212148.4541 2021Q461295032168.1894 2022Q161141073747.9023 2022Q275340090548.0986 2022Q381272076633.8142 2022Q479786842293.3545
Table 2 Gross Corporate Profits by NACE sector, Q4 2022

These estimates have been broken down by economic sector (Figure 2) using the NACE Rev.2 classification system. Please see the background notes for further information on the composition of the six sectors displayed in these results. Industry profits earned in Q4 2022 (€43.2 billion) accounted for 54% of total profits in the quarter, making it the largest sector in terms of earnings. Information & Communication was the next largest sector earning €19.7 billion in Q4 2022. Comparing 2022 profits over the previous year, all six sectors displayed increases. In particular, profits in Other Services increased by 62.6% in 2022 to €24.1 billion. This sector is comprised of activities such as hospitality, transportation, legal & accounting, entertainment, and real estate among several others.

Administrative & Support Service ActivitiesFinancial & Insurance ActivitiesIndustryInformation & communicationOther ServicesWholesale & Retail Trade
2017Q12.842994266625911.7154361653029321.07844286922795.056965760474843.144591757473681.80932970960132
2017Q23.004923120244792.4560956453652220.36241558290475.514045356392952.586273105925742.37883550712394
2017Q33.370454116444151.6756999373454922.13597870320426.386422122573062.670327480845612.23567224856803
2017Q43.54097121647562.0532553862832425.19109578279317.320697348004232.821748794597043.23404756366217
2018Q13.640796302220161.8468460259977124.27478717768267.831880457503322.417764508094562.14701967636234
2018Q23.854864386414622.0809476867859324.17873069183226.981446228804273.008022795512162.33544290542931
2018Q33.905176826409652.0495991275286225.93625455647747.719606745583263.173980943241472.77983680185768
2018Q43.984262813361512.3970205497433325.83056892775789.165752744449433.535749232852333.13077107087893
2019Q14.372336055500122.1262666098269827.81405496010868.250800969140882.492163811634282.4313803029439
2019Q24.684077100056322.2712651330266423.213434589060611.69035468309392.669168004685462.32156392167425
2019Q34.800821034490982.0357805310006427.58051367925379.543745065822043.198948756424852.81820719147475
2019Q44.937462348601641.4877765394853926.625426410503912.4593615220853.30037682552133.44032560029914
2020Q14.381867011772781.6811786897446929.403062902171411.37452803047253.459686291449912.80306607186479
2020Q24.117342111511261.9188008060920728.968588119965611.54031264402352.062612607919923.72221745679239
2020Q33.983043510508290.50760158262794231.879174267242115.07887060866693.648064830570093.08662173614504
2020Q44.243460060193181.6254382842290729.819902596361913.13621251926582.635213846217843.0257120940384
2021Q13.628831336666961.2859053682793937.061131684195215.62813695243182.571611801119032.47597008237423
2021Q24.024503616920123.0490864798980533.960523736073915.59082189139613.122089787085533.26973749687541
2021Q34.322104743125010.76389887336031237.469114384674313.62176306276044.312351331087053.31997975344702
2021Q43.627388856879522.0609949438984230.508409914338216.5768010163834.851356888512653.67008054817766
2022Q13.986341954562251.8842550839760429.460450685556117.01000509343765.551313741441533.24870718892873
2022Q23.864411405873552.3232487860928441.539485775110418.78871592590645.522651738160143.30157691695515
2022Q34.269726440054321.5750350170370448.543192289432416.39977972790856.426608357041224.0577348023407
2022Q44.789016527587852.2382587924814143.198784860960119.72704380124766.6591306849073.17460762617044

Using information on the ultimate controlling parent of enterprises, profits of foreign vs. domestically owned corporations can be compared*. Figure 3 shows the steeper growth in profits earned by foreign-owned corporations in recent years compared to their domestically owned counterparts. Foreign-owned corporations earned €261 billion in 2022, which represents a 98% increase over 2017, while profits of domestically-owned corporations increased by 61% over the same period. Figure 4 allows a visual comparison of profits earned in each economic sector and ownership group. Foreign-owned corporations in Industry, which is driven by multinational manufacturing enterprises, are the largest profits earners in the state; followed next by foreign-owned ICT corporations.

*Redomiciled PLCs have been defined as foreign-owned in this analysis. Please see the background notes for further details on the treatment of redomiciled PLCs
DomesticForeign
2017Q15.1373902397740330.5103702889326
2017Q25.7137368162407530.5888515017166
2017Q35.7095980845974132.7649565243831
2017Q45.8443501205699838.3174659712454
2018Q15.5100831783626936.6490109694981
2018Q25.6063627940625836.8330919007158
2018Q35.6376278637617239.9268271373363
2018Q46.2569639722362741.787161366807
2019Q15.756311685042541.7306910241122
2019Q26.0573694351870240.7924939964101
2019Q36.1131371900831143.8648790683838
2019Q46.465970285748945.7847589607475
2020Q16.1029411722332447.0004478252428
2020Q25.8617991622905246.4680745840142
2020Q35.0437916027403453.1395849330201
2020Q46.2407634212566448.2451759790496
2021Q15.8096643709275456.8419228541391
2021Q27.901969158102155.1147938501469
2021Q36.6079078484259957.2013043000281
2021Q48.1735808540702553.1214513141192
2022Q18.171520736974352.969553010928
2022Q28.7513829326672466.5887076154313
2022Q39.5709772458882471.701099387926
2022Q49.61977126027870.1670710330765
Table 3 Gross Corporate Profits, by ownership

DomesticForeign
Administrative & Support Service Activities1.481609311293183.30740721629467
Financial & Insurance Activities1.263215032440730.975043760040684
Industry2.170745733009841.0280391279503
Information & communication0.33998231739345319.3870614838542
Other Services2.96142692166253.6977037632445
Wholesale & Retail Trade1.402791944478341.7718156816921

Continuing with the experimental theme of this analysis, quarterly estimates of consumption of fixed capital (CFC) within corporations have been developed. When the CFC attributed to corporations such as that on buildings, machinery, and intellectual property has been deducted from gross corporate profits, this allows a view of net corporate profits by economic sector (Figure 5 & 6). In Q4 2022, net corporate profits of €50.2 billion were earned in the state.

Consumption of Fixed CapitalNet Corporate Profits
2017Q115.705224753804519.9425357749021
2017Q216.615636290784119.6869520271733
2017Q317.435162315459721.0393922935209
2017Q416.429111707843527.7327043839719
2018Q117.68770157467924.4713925731818
2018Q218.145808920231524.2936457745469
2018Q318.418869521068227.1455854800299
2018Q418.404626011507829.6394993275356
2019Q118.931538971536328.5554637376185
2019Q220.186048208798426.6638152227987
2019Q321.186822017821628.7911942406453
2019Q420.745757981393131.5049712651032
2020Q123.798278840074329.3051101574017
2020Q224.984046308454427.3458274378503
2020Q323.483198726585434.7001778091751
2020Q424.08059037071530.4053490295912
2021Q124.601840947836138.0497462772305
2021Q224.88073777733938.1360252309099
2021Q325.3237620310538.485450117404
2021Q426.27692953904635.0181026291433
2022Q126.69793504568434.4431387022181
2022Q226.98630905479648.3537814933026
2022Q328.07951123332253.1925654004922
2022Q429.60351482837350.1833274649815
Table 4 Net Corporate Profits by NACE sector, Q4 2022

Administrative & Support Service ActivitiesFinancial & Insurance ActivitiesIndustryInformation & communicationOther ServicesWholesale & Retail Trade
2017Q11.231412248725911.3374043130029211.25218415478993.533829964774841.126607572887191.46109752072133
2017Q21.353452955844792.0722407263652210.03173587569973.776116054192950.4510954792666422.00231093580395
2017Q31.676750861344161.2815381493454911.95691285536323.811012693473060.4670355254569131.84614220853803
2017Q41.80702910577561.6449415284832415.88873761424624.884250283304230.6499359411704442.85780991099217
2018Q11.824833543620161.4224744864977114.03359340020635.252094955703320.1661537850819591.77224240207234
2018Q21.952415580014621.6575768232859313.70606976729934.309075880004270.717503327963461.95100439597931
2018Q31.892548633509651.6245512709286215.39281726767454.990827387983260.8562962856861672.38854463424768
2018Q41.809365035261521.9668572346433315.65647241307986.316083098349431.161706332372532.72901521382894
2019Q12.041062091700131.6834362248269817.25875599226185.385939398440870.1709266408047832.0153433895839
2019Q22.222633438556321.8331540355266311.97571309105718.611592093193850.1283548453805621.89236771908426
2019Q32.236710336290981.5888755595006416.38397504535835.598796583322030.5940308431686432.38880587300476
2019Q42.257213647601641.0205227679853916.10260154823198.473796063984980.6420188254801453.00881841181914
2020Q11.640905814472781.2058239211446916.47206357493216.852226498872430.7720237266349072.36206662134479
2020Q21.346426502811261.4661566820920715.94717396161625.90523492702346-0.6074290628050813.28826442711239
2020Q31.234095324208290.043906233627942219.77936580538279.883708306566971.08744825027412.67165388911504
2020Q41.468473008893181.1305112811290717.62369716240397.555877281965840.03712227892084122.58966801627841
2021Q10.860110678866960.76022600637938624.58024399692619.84770257753182-0.03022581370797492.03168883123423
2021Q21.261374069220122.5413242980980521.30363578143289.674845119996030.5251370575275372.82970890463541
2021Q31.557124093825010.23508868466031224.53785695210437.597634826460331.688694179297052.86905138105702
2021Q40.8411220748795131.4911700641984216.980221474987210.35610448858292.149131614447663.20035291204766
2022Q11.168532838162251.2589120760760415.8317172684310.64783038593762.770807341903522.76533879170872
2022Q21.025375392273541.7075264762928427.694517416326412.38479322290652.720126566998142.82144241850514
2022Q31.402482537054320.95278557233703533.84483088273549.862020354208533.555314076686223.57513197747071
2022Q41.877427085487861.5885331482814227.780293266144112.64556587894773.615626776182.67588130994044