Shannon firm back in profit

THE main Irish arm of industrial diamond manufacturer Element Six stormed back to profit last year, a year after its Shannon plant was threatened by closure.

Accounts filed by De Beers-backed Element Six show that the company recorded a pre-tax profit of $42.4 million (€30.7m) last year, following substantial combined losses in the previous three years.

The company returned to profit after increasing revenues by 58%, from $205.5m to $325.1m to the end of December last.

In the three prior years, the company recorded combined pre-tax losses of $71m and the facility — established in Shannon in 1960 — was faced with closure in July-August 2009.

However, a survival plan was put together that involved the loss of 207 jobs at the plant. The figures show that more than half the combined $71m loss for 2007-09 went towards restructuring the Shannon operation.

The company — co-owned by De Beers (60%) and Umicore (40%) — paid an interim dividend of $19m in December 2010.

Employee numbers fell from 470 to 351 last year, with staff costs declining from $31.7m to $27.7m. The company’s wage bill in 2008 was $62m.

Element Six recorded an operating profit of $49.7m in 2010, which was reduced by $7.2m through interest payable and finance expenses to a pre-tax profit of $42.4m.

The company enjoyed a tax credit of $2.7m, resulting in a post-tax profit of $45m.

A note attached to the accounts states that the “directors have reviewed the forecast for the 12 months to March 31, 2012, prepared by management, which indicates the company will have sufficient funds to meet its obligations as they fall due”.