Shannon agency narrows its losses

Pre-tax losses at Shannon Development last year narrowed by 27% to €11.9m as the property crash continued to impact on the agency’s finances.

The semi-state company narrowed its losses in spite of revenues declining by 7% from €32.4m to €30.2m in the 12 months to the end of December last.

CEO Vincent Cunnane said yesterday he was “quite pleased” with last year’s performance. He pointed out the largest contributor to last year’s pre-tax loss was a combined non-cash cost of €10.5m made up of a depreciation charge of €7m and a €3.5m write-down in property assets.

Shannon Development’s rental earnings from its €100m property portfolio dropped by 8% last year from €13.3m to €12.2m.

Its income from property sales has collapsed resulting in combined losses of €45.6m in the past three years, largely made up of impairment charges and depreciation.

As part of the overhaul of Shannon Airport, the Government has proposed that Shannon Development lose its enterprise and tourism functions. Asked if the company will still exist next year, Dr Cunnane said: “It is too early to say. The deliberations are ongoing.”

He acknowledged “it is a period of uncertainty for Shannon Development, but in a way, we always have had uncertainty. At the moment, it is business as usual”.

The annual report shows Dr Cunnane’s salary last year was €154,183. His remuneration for 2011 amounted to €181,396 when pension contributions of €14,493 and €12,720 of benefit in kind are taken into account.

The 12-person board received aggregate emoluments of €116,000 with chairman, Cllr John Brassil (FF) receiving €20,000. The board also incurred an extra €22,000 in expenses.

Staff costs last year fell by 2.5% from €14.1m to €13.7m with numbers employed decreasing from 267 to 256. Dr Cunnane said it was a year of stabilisation for companies in the Shannon Free Zone with job numbers declining by 3%.

The directors’ report states the company’s five- year corporate plan showed it returning to financial sustainability and delivering a significant capital investment programme by 2013.

It says: “A significant improvement in underlying economic conditions will be required in order to facilitate the realisation of a number of major property sales and investment projects by the company.

“Accordingly, the company will adjust a number of the strategic plan key performance indicators such as job creation targets, visitor numbers and capital expenditure targets during 2012 and 2013 in order to take account of the prevailing economic climate.”


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