Element Six profits hit by slowdown in oil and gas sector
The downturn in the oil and gas industries contributed to pre-tax profits at Shannon-based industrial diamond manufacturer Element Six last year, slumping 83pc to $14.2m (€12m).
The company sustained the sharp drop in profits after revenues decreased by 14pc - going from $228m to $194m.
A $9.3m non-cash impairment of a financial asset also contributed to the drop in profits.
The Shannon plant is a key part of the Element Six network of plants and earlier this year, the company announced plans to increase numbers employed to 550 and additional capital investment of $7.3m.
According to the directors' report, "the main challenge of 2016 was continuing to manage the impact of the slowdown in the oil and gas sector which continued to hold back revenues".
The directors state that they have continued to focus on tight cost control and on increasing market share to mitigate the impact of the slowdown.
They state that the €25m diamond synthesis facility at Shannon which came on stream in 2016 continued to develop and consolidate the site's position as a key element of the group's manufacturing operations.
The directors state that the principal risks facing the firm include low-cost competition from Eastern European and Asian suppliers
The directors state: "The Element Six group continues to invest in Research and Development (R&D) into new products and technologies and it is hoped that these will yield increased market share and market growth."
Overall numbers employed by Element Six Ltd increased from 393 to 422.
This was from a base of 250 people employed after the introduction of a survival plan at the plant in 2009 that involved the redundancy of 207 workers.
Staff costs last year rose sharply from $26.9m to $31.5m.
The profit last year takes account of hefty non-cash depreciation and amortisation costs totalling $13m.
The firm had shareholder funds of $117m.