Building materials group Kingspan has reported pre-tax profits of €56.7m for the year to the end of December, a decrease of 17% from the €68.1m reported in 2008.
Revenues at the Co Cavan-based firm dropped by 33% to €1.125 billion from €1.672 billion in what the company called 'hostile economic conditions'.
Kingspan, which makes construction industry supplies from raised access floors to timber frames, said its operating profits slumped 60% to €62.7m and said that no final dividend in respect of 2009 be paid.
It said that resumption of dividend payments will be considered by the board in 2010 after debts were reduced last year, and depending on its ongoing cash flow and operating performance reaching expectations.
'In 2009 we experienced a set of global challenges never encountered before by the business,' commented Kingspan CEO Gene Murtagh.
'In the circumstances the company delivered a robust and resilient performance having responded to the challenges by overhauling our cost structure and focusing on cash generation,' he added.
He said that while the year ahead will present continued challenges, there is now tangible evidence of stability emerging with conditions becoming more predictable than in the recent past.
Kingspan said that widespread reorganisation and cost-cutting programmes led to an underlying reduction of €66m in its fixed cost base since its peak.
Sales in insulation panels division down 31%
The company's insulation panels division saw sales fall by 31% to €593.9m with volumes suffering heavily in the UK in the early part of the year before broadly flattening out for the latter six months.
However, Irish volumes continued to reach new lows as the year drew to a close. Kingspan said that newbuild activity in this segment has fallen to levels not seen in Ireland for 30 years as a direct result of the overbuild of houses in 2007 and early 2008.
Sales in Poland and Germany were relatively strong, but sales in the Czech Republic, Hungary, the Baltics and Romania were 'exceptionally weak' as funds availability and confidence were both hit.
In North America, non-residential building tapered off sharply during the year and underlying sales were down 23%. Volumes in Canada were more severely impacted, due to the fall-off in developments in the oil producing regions.
Sales in insulation boards division slump 38%
Sales in Kingspan's insulation boards division fell by 38% to €215.3m with the refurbishment market providing a solid base for the business in Ireland last year given the collapse of the newbuild segment.
In the UK, newbuild housing activity was lower that it has been for decades and volumes were down 25%. From April 2010, building codes in the UK will be upgraded once again and Kingspan says that as the codes become stricter, the attractiveness of its thinner and more thermally efficient products will be evident.
Kingspan said that sales in mainland Europe were comparatively stable, with volumes down 7% last year.
The company said that with about 75% of its environmental and renewables division's sales coming from the UK and Ireland, the business bore the brunt of the recessionary slide in both markets. Sales fell by 37% to €168.7m last year.
This unit's product range is extensive and includes thermal hot water systems, heat pumps, rainwater harvesting, water storage, fuel storage and wastewater treatment systems - most of which are used in the residential segment.
Sales in the company's access floors division decreased by 26% to €147.6m with underlying conditions in the sector deteriorating in the second half of the year. Kingspan says it expects office construction starts will hit a low this year, due to the excess current capacity in the market. It notes that vacancy rates in major US and European cities are at five-year highs.
Kingspan eyes more predictable markets
Looking ahead, Kingspan said that it is likely the overall building environment will be more predictable than in the recent past. 'The virtual collapse in activity experienced in late 2008 and 2009 should be replaced with a more stable, albeit notably lower base from which to build business once again,' the company said.
'The current year will continue to pose challenges for Kingspan as come economies climb slowly out of recession, leaving behind a construction environment that has not yet fully caught up with the general contraction of last year,' it stated.
It warned, however, that some markets will see a further fall in building activity this year.
Kingspan shares jumped 11% to close at €5.55 in Dublin this afternoon.
