Profit drop
Apple posts lower earnings in NZ
Apple Sales New Zealand, the local unit of the iPhone and iPad maker, reported a lower annual profit on a higher cost of sales, despite spending less buying inventory from related companies.
Profit was $6.5 million for the year ended September 24, 2016 versus $17.8m a year earlier, according to financial statements lodged with the Companies Office.
Revenue rose 1.6 per cent to $744m. Of that, sales of goods rose to $732m from $721m the prior year, while service fee income rose to $12.4m from $11.5m.
The New Zealand division’s cost of sales rose 3.9 per cent to $729.2m, in a year when purchases of stock from related parties fell 6.1 per cent to $675.7m.
Apple Sales New Zealand said it paid a total dividend of $28.4m to its parent on June 16. There were no dividends declared in the prior financial year.
The local unit of the world’s biggest company by market value faced a $3m tax expense.
The company’s accounts indicate that the initial tax expense was $9.3m but there were $6.2m in deferred taxes.
Notes to the accounts say there are certain transactions and computations for which the ultimate tax determination is subject to the agreement by the relevant tax authority and the company recognises liabilities for such transactions based on estimates of whether additional taxes will be due.
The carrying amount of its tax payables and deferred tax assets as at September 24, 2016 were $9.3m and $16.8m respectively.
Apple is one of a number of high- profile multinational companies which have been criticised for minimising tax by routeing profits through offshore subsidiaries.
Apple NZ’s cashflow statement shows it paid $10m in income taxes in the 2016 financial year, up from $6.4m a year earlier.