Red Bull Racing has registered a decline in its profit despite of a better turnover for year 2016. The F-1 team witnessed a decline from the champions’ position in 2013 to a winless fourth in 2015, has generated a turnover £197m ($ 264m) in 2016.
Red Bull ended up spending almost all of its 2016 earnings on its F1 race programme.
The team earned £197,949,000 ($ 264,843,000) from sponsors, prize money and bonuses from the F1 organisation. The figure also includes receipts from the Red Bull F-1’s parent company, Red Bull GmbH in Austria, Motorsport.com has reported, citing the Red Bull accounts. This resulted in a net profit of £385,000 ($515,00) after taxes and expenses.
Even as the team has earned £16,700,000 ($ 22,343,000) more than its gross income in the previous years, its profit declined by £1,756,000 ($2,349,000). The team would have run into major losses, but for more than a 300% jump in its receipts from Red Bull GmbH – £10.1m ($13.51m) in 2015 to £40.6m ($ 54.32 m) in 2016.
The parent company had to infuse more money as the team’s revenue from Formula One earnings declined on account of their poor performance on the track. The 2013 champion team remained winless to finish in the fourth position after it had ended up at No. 2 the previous year.
Team’s better showing in 2016 also resulted in an increase in the expenses. Costs went up partially due to the two GP wins for Max Verstappen and Daniel Ricciardo, coupled with a rise to second in the championship resulted in an increased success bonuses for staff.
The team’s true financial situation is hard to compare with that of its rivals, because Red Bull Racing itself only employs 58 people – in effect the race team, the report suggests. Design, production and engineering is carried out by immediate parent company Red Bull Technology Group, which employs 758 people and also supplies services to Scuderia Toro Rosso and outside projects such as the Aston Martin Valkyrie.