Engineering firm Kentech back in profit

INTERNATIONAL Cork based engineering group Kentech last year returned to profit after revenues increased by 17% to $137 million (€102.8m).

Accounts for the Kentech Group — which employs more than 3,200 people — show that the group recorded a pre-tax profit last year of $8.2m (€6.1m) to the end of December last after recording a pre-tax loss of $6.5m (€4.8m) in 2008.

The Kentech Group operates for the oil, gas and petrochemical industries in Russia, Azerbaijan, Mexico, United Arab Emirates (UAE), Qatar, Kuwait and Kazakhstan.

The returns show that the company’s revenues increased by $20.7m last year from $116.4m to $137.1m with the group’s costs of sales increasing by 12% from $98.3m to $110.5m.

A company spokesman yesterday attributed Kentech’s strong results for 2009 to the commitment and dedication of its staff.

“We continue to grow and evolve and have been able to post strong results despite the economic downturn. This demonstrates the success of our strategy going forward.”

According to the directors’ report for Josar Holdings Ltd, they state that they “are pleased to see the group returning to a modest profitable position after a difficult couple of years, especially in the light of the continuing global recession throughout the year”.

They added: “Investments made in the Middle East in previous years are now bearing fruit as the strategic targets set for the region are being consistently met or exceeded and the group cements its position as one of the region’s leading suppliers of the group’s specialist services.

“Strong sales are reported in both UAE and Qatar in particular.

“Operations in the former Soviet Union continue at steady levels when compared to the previous year and provide the group with a stable, profitable platform in these challenging environments.”

The directors’ report also said the group had been successful at diversifying into man-power supply across all regions. It admitted losses were recognised on a large unit project in Abu Dhabi that was delayed for reasons outside the control of the group.

It said: “Provisions have been made against part of the outstanding receivables for a major project in Kazakhstan due to ongoing contractual difficulties between the group’s direct customer and the final client on the project.”

The directors added: “The group has not required additional external cash funding during the year, but the directors do consider the level of indebtedness to be too high and initiatives are under way to reduce and restructure the level of exposure.”

The returns show that the numbers employed by the group last year increased by 9% from 2,977 to 3,261 with staff costs declining by 13% from $67.2m to $58.3m.

The breakdown of the group’s turnover shows that 79% or $109.6m was generated from construction contract revenue and the remaining $27.5m from revenues secured from rendering of services.