The loss of major business from a significant customer contributed to the Irish unit of computer part manufacturer, Celestica plunging into the red in 2013.
Newly filed accounts show that Celestica Ireland Ltd recorded post-tax losses of €3.36m in spite of revenues rising 15% to €68.68m.
During 2013, numbers employed by the firm increased from 375 to 441.
However, after reduced demand from a significant customer towards the end of the year, the company made a decision before year-end to restructure its business.
The directors state that the result for 2013 was significantly impacted by restructuring costs of €4.24m which comprise employee and contractor termination costs and provision for contractual lease obligation.
They further state the 15% increase in revenues in 2013 “was primarily due to a significant increase in demand from one customer. Margins remain quite tight for the company due to the pricing agreement with its key customers”.
The firm specialises in high-volume manufacturing and assembly on high- precision automated lines and the Galway facility is a key provider of the company’s automated manufacturing services offering.
The directors’ report section of the accounts says management will “continue to seek new opportunities for the company and to effectively manage the company’s cost base and operating margins”.
The directors also note, however, that some of the key risks and uncertainties facing the firm are the company being reliant on its two main customers.
Staff costs in 2013 rose €3.8m from €16.1m to €19.9m and remuneration for the two directors, Kevin Walsh and Patrick Leamy decreased sharply from €260,664 to €98,726.
The company’s shareholder funds at the end of December 2013 had fallen from €10m to €6.9m. Its cash decreased from €4.3m to €3.3m. The company spent €1.3m on R&D in 2013.
The profit took account of non-cash depreciation costs of €76,165. Celestica Ireland’s cost of sales increased sharply from €50m to €57.3m with administrative expenses increasing from €8.5m to €10m.
The figures also show the vast proportion of the company’s sales took place in Ireland in 2013 with €68.42m here and €260,798 in other countries.
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