Friday 20 October 2017

Higher costs push diamond manufacturer into the red

Shannon-based Element Six increased its workforce last year
Shannon-based Element Six increased its workforce last year

Gordon Deegan

Industrial diamond manufacturer Element Six last year went into the red to record a pre-tax loss of $2.5m (€1.9m).

The Shannon-based firm increased the number of people it employs to 357 last year and new figures show that the company recorded the pre-tax loss following a pre-tax profit of $1.45m in 2012.

This followed revenues declining from $285.2m to $280.5m in the 12 months to the end of December last.

According to the directors' report "the main challenges of 2013 were maintaining revenues and margins in light of market uncertainty and managing the impact of foreign currency fluctuations on our business."

The site at Shannon is primarily involved in the final processing to sales product of diamond grit and polycrystalline diamond hard materials.

The plant was faced with closure in July-August 2009, but a survival plan was put together that involved the loss of 207 jobs in order to secure the remaining positions.

Employee numbers continued to grow last year, increasing from 323 to 357 - however, the directors stated that the company continued "to monitor the appropriateness of its cost base".

The firm wound up its defined benefit pension scheme in 2012 and the decision was the subject of an unsuccessful High Court challenge by 124 members of the scheme against the pension scheme's trustees in February of this year.

The accounts state that the judgement is no longer subject to appeal but that further legal action cannot be ruled out.

The loss last year takes account of hefty non-cash depreciation and amortisation costs totalling €13.6m.

The accounts show that in spite of the drop in revenues, the firm's costs of sales and administration increased last year .

The firm's staff costs last year increased from €28m to €30.18m, with directors' remuneration decreasing sharply from €1.495m to €957,000.

Irish Independent

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