Shannon Development losses hit €17.2m

PRE-TAX losses at state agency Shannon Development last year increased three-fold to €17.2 million due mainly to the collapse in the property market.

In its 2009 annual report published yesterday the accounts confirm that its pre-tax loss increased by 233%, from €5.1m in 2008 to €17.2m to the end of December last.

The directors’ report states that the company has operated a self-financing model since the 1990s primarily based on using revenue from its property base to fund its day-to-day operations and economic development projects.

In the eight years prior to last year, the company’s profits from the sale of property assets totalled €68m that partially funded the company’s operating deficit of €102m during the same period.

However, the accounts filed with the annual report show that property sales profits plummeted last year by 71%, from €8.5m to €2.4m.

The company’s expenditure includes an impairment charge of €4m on its property portfolio.

Its operating deficit increased by 28% from €14.4m to €18.6m.

This followed the company’s revenues dropping by 11% from €33.7m to €29.7m.

Chief executive, Dr Vincent Cunnane said: “We have a new financial plan which is to address the deficit and to make sure that we get back to a balanced budget in 2013.”