Mincon posts record €15m profit but sales down 17pc
DRILL-bit maker Mincon posted its highest operating profit last year but its industry is continuing to slow, the company said yesterday in its first set of results since its initial public offering.
The Clare engineering firm made an operating profit of €15m last year, according to its latest annual accounts – a record high and an increase of nearly a fifth on the year before. But sales fell to €52m, down 17pc from €63m in 2012.
"The strong group performance achieved in 2013 was against a global background of weak demand for mining products driven by the decline in the price of precious metals, which has continued into 2014," said the company, which famously made a part of the drill that rescued stranded Chilean miners in 2010.
This slow down in the exploration mining market is likely to continue, it added. It has also been hit by several weeks of disruption in the US at the start of this year, from adverse weather.
The ISE-listed company is also being hurt by currency fluctuations in some of the markets it operates in, particularly a weakening of the South African Rand and Australian Dollar. This currency volatility lost it €1.3m last year and is likely to continue.
"The risk posed by the volatility in currency markets remains a concern" it said.
But Mincon's board played down these risks. "The board remains confident of achieving further progress in the coming year," it said.
It has increased its share of the global rock-drilling products markets, chief executive Kevin Barry added, which generates higher margins than what it earns from the sale of third-party products.
The company is at an advanced stage of talks on several acquisitions that should expand its products and customers, the accounts added.
Davy Stockbrokers cheered the results. "The performance of Mincon's own products through what was a very difficult year for industrial engineers shows the benefit of the company's exposure to the consumable market," said analyst Colin Sheridan.
Mincon's share price had fallen 4pc to 99 cent on the ISE yesterday morning.