Losses at construction firm Gama hit €48.5m
Beleaguered company to 'continue operating for foreseeable future'
Operating losses at beleaguered construction firm Gama widened to €48.5m last year, as the company's turnover slumped by 14pc to €82m.
Turkish-owned Gama Construction, which shot to notoriety in 2005 amid claims it was underpaying its Turkish workers in Ireland, specialises in infrastructure projects and is currently working on bypass roads for Ennis and Monaghan.
The company's 2006 figures show it is now suffering from operating loss margins of almost 60pc, suggesting Gama incurs expenses of €1.60 for every €1 it takes in in sales.
Last year's figures, however, were saved from total collapse after a €63.9m exceptional gain. That gain was largely linked to Gama's 2006 sell-off of a 40pc stake in the Tynagh energy plant, which was snapped up by GE.
The sell-off reduced Gama's own Tynagh stake to 40pc, which means Gama will now treat Tynagh as an associate and not a subsidiary, in an accounting move that will put further pressure on Gama's topline.
After including the exceptional gain and various interest charges, Tynagh made a profit of about €10m for the year.
That profit put a dent in the company's accumulated losses, reducing them to €50m, but Gama still closed 2006 with shareholders funds close to €44m in the red.
The company's directors said it was appropriate to continue to treat Gama as a going concern since its Turkish parent had agreed to support the group over the next 12 months and since the company was "actively tendering for a number of projects".
"The directors have a reasonable expectation that the group has adequate resources to continue operating for the foreseeable future," they added.
Gama's average staff costs rose by 35pc during the year, to €70,700 in 2006, while the company's workforce was reduced by 602 people to an average of 373 (304 of which are Irish and 69 of which are Turkish).
A further breakdown shows that the average salaries paid to Irish workers came in at €65,000, almost €10,000 higher than the average payments made to the Turkish workers.
The company's directors' report also makes reference to the legal actions which have marred Gama's recent history in Ireland.
In 2005, Edward Nolan, head of the Labour inspectorate of the Department of Enterprise and Employment, prepared a report into alleged mistreatment of Gama's Turkish workers who were carrying out work in Ireland.
The report was never published, following legal manoeuvers from Gama. However, the Department of Enterprise is still pursuing a Supreme Court challenge calling for its publication. The directors' report notes that Gama is "confident" the "appeal will not succeed".
Founded in 2000, Gama Construction Ireland Ltd is a subsidiary of Turkish construction giant Gama International BV.