Profits collapse at explosives supplier
A COMPANY that is part-owned by construction giant CRH saw its profits collapse by more than four-fifths last year, as the downturn in the construction sector continued.
Kemek Ltd, which supplies industrial explosives and describes itself as ''a solution provider in the application of explosives'', reported a profit after tax of €1.96m in the year ended December 31, 2009, according to accounts just published. That compares with a profit after tax of €10.95m in 2008. Turnover fell by more than €18m to €43.8m.
The company trades as Irish Industrial Explosives in the Republic and as Ulster Industrial Explosives in the North, with its main plant in Enfield, Co Meath. CRH has a 50pc stake in the company, with the other half-owned by the France-based EPC Group.
The company cut its workforce by more than a quarter to 91 employees during the year as the downturn took a firm hold on the business. It paid a dividend of €2.9m compared with more than €14m in 2008.
"There was a very significant drop in sales demand in 2009 compared to the previous year. Falling demand on a month-by-month basis resulted in sales revenues being down 43pc for the full year compared to 2008," the directors said.
"A number of major restructuring programmes were completed to reduce costs and match capacity to demand. The outlook for 2010 is for an even more challenging environment as capital spending in the economy is further curtailed and many road construction activities due to finish, with virtually no significant new projects in the pipeline in the medium term," they added.
Despite the profit fall, there is no suggestion that there are any doubts about Kemek's long-term viability as a business.