Rocket Lab Looks at Repaying $2.85 Million Pandemic Wage Subsidy22nd Jun 2021
Space engineering firm Rocket Lab is carrying out an internal audit to determine whether it should repay any of the wage subsidies it received through the New Zealand government’s pandemic relief scheme. Rocket Lab claimed $2.85 million in subsidy for its 408 New Zealand employees in 2020. However, its recent financial reports have indicated that it’s “unlikely that the conditions of the grant have been met.”
Rocket Lab Considers Results of Internal Audit
A company spokesperson said Rocket Lab faced severe uncertainty due to the pandemic, making launches impossible and suspending manufacturing operations. However, the situation in New Zealand stabilised relatively quickly. In response, Rocket Lab commissioned an internal audit to determine if it had met the criteria for the wage subsidy when taking into account Rocket Lab’s financial results for the year.
Rocket Lab Show Operating Profit in 2020
To qualify for the first round of relief, businesses had to have exhibited a 30% drop in revenue during months from January to June 2020, compared with the same period in 2019. Financial statements from Rocket Lab, however, show that it generated a profit of $1.1 million from $90 million in revenue in 2020. This is in stark contrast to the loss of $32,000 recorded in 2019. Many high-profile companies have returned their subsidy money as profits have recovered, with $708.8 million repaid by 14th May this year. The situation for Rocket Lab is further complicated by the fact that it’s headquartered in the US, where it generates the majority of its investment.