Kentech investments bear fruit as revenue rises 17pc
Published 26/11/2010 | 05:00
Cork-based engineering group Kentech, which supplies services to the petrochemical industry in countries such as Russia, Mexico and the United Arab Emirates, surged back into the black last year as it posted a pre-tax profit of $8.2m (€6.1m). That compared to a $6.5m loss in the previous year.
Accounts just filed for the business, which is headed by chief executive Sarah Kent, show that revenue at the group rose 17pc to $137.1m (€102.5m) last year, as it secured new contracts.
The directors said that they were pleased with the company's performance after what they described as a "difficult couple of years", especially in light of the continuing global recession during 2009.
"Investments made in the Middle East are now bearing fruit as the strategic targets set for the region are now being consistently met or exceeded," they said, noting strong sales in United Arab Emirates and Qatar in particular.
The directors also note that the company's level of indebtedness is "too high" and initiatives are under way to reduce and restructure the level of exposure.
Net debt at the end of 2009 was $17m, giving it a debt to equity ratio of 1.8 times.
The company, which employs over 3,200 people, has a $24.5m overdraft with National Irish Bank, and has been involved in negotiations with the bank to repay $10m of that via monthly repayments of $400,000 that began last May, as well as making other bullet payments.
Kentech said its operations in the former Soviet Union have continued at "steady levels". Apart from Russia, where it's working on Sakhalin Island with Exxon Neftegas, Kentech also operates in Kazakhstan.
In addition to the petrochemical sector, Kentech is also active in projects such as desalination plants and aluminium smelters.
The latest set of accounts also note that provisions amounting to $1.1m have been made against part of the outstanding receivables for a major project in Kazakhstan, due to ongoing contractual difficulties between Kentech's direct customer and the final client on the project.