“WhatsApp Ireland’s Losses Rise Amid Fines”

The Dublin-based main European arm of Meta’s messaging platform, WhatsApp Ireland, reported an operating loss exceeding €2.4 million in the previous financial year. This reversal of fortunes came as a result of the firm escalating its reserves to prepare for likely regulatory penalties.

The organisation, which was hit with a massive €265 million fine by the Irish Data Protection Commission (DPC) in 2021 due to a variety of infringements to Europe’s data privacy regulations, is involved in the supervision of data for its ample 500 million-plus user base situated in the EU.

Meanwhile, an appeal against the DPC’s fine lodged by WhatsApp Ireland in the High Court is still in limbo, awaiting a ruling from the Courts of Justice of the European Union following an earlier adjournment.

Recent financial documents lodged in Dublin disclosed that the business slid into an operating loss greater than €2.4 million last year following operating profits surpassing €40 million in 2022. Moreover, annual administrative costs at the company soared from €15.8 million in 2022 to €58 million, overshadowing the firm’s revenues of €55.3 million.

According to an attached report, company directors claimed this sudden surge in expenses resulted from the “recalculation of regulatory compliance provisions based on the present value of the best estimate in comparison to the preceding year”.

WhatsApp Ireland’s accounts disclosed that the firm allocated an extra €4.3 million towards any ensuing penalties due to modified estimations and metrics. At the end of the financial year, the firm had a hefty reserve of over €203 million in readiness to pay any imposed fines, marking an escalation of around €9.7 million from the €193.4 million observed at the end of 2022. The reserve includes the €4.3 million put aside in 2023 together with an added €5.4 million as it overturned previous decreases in its reserve that contracted by €45.3 million in 2022 through discounting.

The company notified in its filings that these provisions are indicative of the present value of their best prediction of the expenditures anticipated to meet these responsibilities.

“The optimal projection is constructed from the guidance of external legal representatives, official communication from regulators thus far, which includes final rulings, appropriate reducing elements, reference to comparable issues and more parameters that could potentially influence the eventual penalties under the applicable laws,” stated WhatsApp Ireland. Furthermore, it highlighted that there is “ambiguity… regarding the timeline of resolution for these issues.”

The firm’s post-tax losses sharply fell to €8.2 million in the previous year compared to a profit exceeding €41 million in 2022. WhatsApp Ireland refrained from issuing any additional remarks concerning these financial figures.

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