Earnings hold steady at Mannok despite surge in input costs

Earnings at Mannok Holdings, the manufacturing company formerly known as Quinn Industrial Holdings, were flat in 2022 from the previous year despite a surge in revenues, largely driven by inflation-driven price increases across its product portfolio.

Announcing the group’s results for 2022, chief executive Liam McCaffrey said on Thursday that Mannok continues to be “actively engaged” with investment bank Evercore on “optimum funding solutions” for its decarbonisation project.

Mannok, the majority of which is owned by three hedge funds – Contrarian Capital, Silver Point Capital and Brigade Capital – told the Anglo-Celt newspaper last year that “nothing has been ruled out” in discussions about the group’s future ownership situation.

The Border-straddling company, which manufactures building materials and packaging for the food industry, generated turnover of €317.7 million last year, a 17.7 per cent increase on 2021 when its operations took a significant hit from the Covid-19 pandemic.

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But group earnings before interest, taxes, depreciation and amortisation (ebitda) were unchanged from 2021 at €25.8 million, the company said in a statement. This reflected “a gradual pass-through of rising input prices”, as well as fluctuations in the euro-pound exchange rate, which negatively impacted its cross-Border operations. Mannok also noted a “softening of demand” from consumers in response to decades-high levels of inflation last year.

“Notwithstanding the unfavourable cost environment”, Mannok said it had “maintained employment levels and continues to employ over 800 staff, an increase of 150 since 2014, making it one of the largest employers in the region”.

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The group also made progress with its €200 million green investment programme last year, it said. This included the adoption of “new world-first” coal displacement technology, helping it to eliminate 40,000 tonnes of coal and 58,000 tonnes of carbon dioxide from its operations annually.

“Operationally, our focus in 2022 was to mitigate inflationary impacts for our customers and employees and to ensure continuing momentum as inflationary pressures ease. Strategically, decarbonisation has been and remains a fundamental priority,” said Mr McCaffrey, adding that Mannok remains “actively engaged with Evercore Partners on the optimum funding solutions to support this investment.”

Looking ahead, chief financial officer Dara O’Reilly said: “Following some volatility in activity levels in 2022, we are seeing renewed momentum year to date and firmer demand, that inform a more encouraging outlook for the year ahead. Capital expenditure across the business increased by a further €11.6 million in the period, bringing total investment since acquiring the businesses in December 2014 to over €90 million.”

Mr McCaffrey also welcomed the appointment of John Moran, former secretary general at the Department of Finance and chairman of the Land Development Agency, to Mannok’s board as a non-executive director.