Accounts Reveal Pretax Losses At WeWork's Irish Business Rocketed In 2022
The Irish arm of fallen coworking giant WeWork recorded a pretax loss of €16.5M for 2022.
The pretax loss followed a small pretax profit of €17,595 for 2021 for the Irish element of the U.S.-based company, while its revenues declined slightly from €1.14M to €1.09M.
The latest accounts show that WeWork Community Workspace Ireland Ltd recorded the losses after writing off €16.2M, which arose mainly in loans due from group undertakings, the Irish Independent reported.
WeWork is one of the largest commercial tenants in Dublin. It is the anchor tenant at the former Central Bank of Ireland building on Dame Street in Dublin and occupies space at 2 Dublin Landings, Harcourt Road and the Charlemont Exchange.
The U.S. arm of WeWork filed for Chapter 11 bankruptcy protection in early November, and the new 2022 accounts for the Irish business have been prepared on a going concern basis.
WeWork’s UK and Ireland division isn't part of the bankruptcy proceedings affecting its U.S. parent company, but lease negotiations with European landlords are continuing — and the flexible office firm has quietly shut or started talks to shut more than 10 London locations in recent months, Bisnow revealed.
The company has no plans to appoint administrators or receivers to WeWork International, the holding company for the UK and Irish operations.
The directors for the firm said in their report that the Irish company “and the directors do not expect any impact to the company’s operations.”
In August, WeWork contacted all of its more than 400 landlords around the globe to seek rent cuts after its costs exceeded its revenue, with its biggest outlay being rents. The company signed long leases at high rents in the period between 2015 and 2019 to grow as quickly as possible, but it was unable to reach the occupancy level to make a profit.
However, in a note attached to the accounts for the Irish entity signed off on 7 December, the auditor RSM Ireland stated, “The financial position of the group represents a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern.”
“Our opinion is not modified in respect of this matter,” RSM Ireland added in a statement.
WeWork in Ireland employed 21 staff in 2022, and the firm had a shareholders deficit of €17M at the end of December 2022, as the company’s cash funds declined from €6.7M to €2M.
Globally, WeWork had 509 locations as of 12 October, it said in its filing, adding that depending on how rent negotiations went, it could close 163 of those. It identified 105 as “never keeps” targeted for definite closure.
