The Cork-headquartered Kentech engineering group last year plunged into the red to record pre-tax losses of $7.79m (€5.75m).
Staff numbers increased by 647 to 3,199, but despite the growth in business — revenues were up 5% from $115.96m to $121.7m — the directors say they “are very disappointed with the results for 2012”.
Last year’s loss followed a pre-tax profit of $9.47m in 2011.
In the directors’ report for the group’s holding firm, Josar Holdings Ltd, they state that they experienced severe delays and disruption outside of the group’s control on a number of contracts.
The directors state that the group is seeking recovery of these additional costs under the terms of these contracts.
The group has reviewed its strategy and amended its plans to have a more balanced mix of contract structures between unit rate, lump sum and reimbursable works and the company is already seeing the benefit of the change in strategy in the latter part of the year.
The group provides a range of engineering services in the gas, mining, power and petrochemical industries in the United Arab Emirates, Qatar, Kuwait, Russia, Kazakhstan, Mexico and Australia.
The loss last year reduced s shareholder funds from $25.8m to $16.9m. The loss also takes account of non-cash depreciation costs of $2.68m
Staff costs last year increased by 11%, from $59.5m to $66.3m.
Remuneration to the group’s five directors increased from $2.4m to $2.65m.
The group last year recorded a gross profit of €10.4m compared to a gross profit of €31m in 2011.
Administrative expenses totalling €16.78m and finance costs of €1.469m resulted in the €7.79m pre-ax loss.
The group also incurred a property revaluation loss of €152,460, a foreign exchange loss of €278,257 and tax expense of €692,281 to give a total loss of €8.9m for the year.
The group paid a dividend of $1.2m in 2011 and no dividend was paid last year.
The directors state that it will continue to develop its Australian business and continue to see significant growth in the UAE “due to our strong performance and track record”.
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