Kingspan saw profits dip by more than 4 per cent in the first half year despite delivering record revenues, as the company grappled with “tough” markets and higher costs.
The company, which is one of the biggest groups left on the Irish stock exchange saw trading profit fall 3 per cent to €422 million.
Group revenue increased by 2 per cent to €4.1 billion, yet operating profit fell to €397.4 million from €414.9 million amid sharply higher costs which rose 10 per cent.
The company delivered a “resilient” first half performance, with revenues reaching “an all-time high despite some tough end markets,” chief executive Gene Murtagh said. “A sluggish but improving start to the year has given way to strong order intake at midyear and we expect full year growth to be more heavily weighted to the second half of the year,” he said.
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“Given our strong order book, continuing advances in our US and emerging markets ... we expect to deliver a better performance in the second half with trading profit growth anticipated for the full year,” he added.
Trading profit came in about €11 million short of expectations, according to Goodbody analyst Shane Carberry.
The company’s trading margin decreased by 0.6 per cent to 10.1 per cent, which primarily reflected a volume weakness in certain markets and the divisional mix of sales, it said. Net debt increased by €544.2 million to €1.5 billion.
Basic earnings per share for the period was 165.9 cent, which was a decrease of 5.3 per cent. The board declared an interim dividend of 26.3 cent.
By market, the Americas performed well for the group, while Europe was more mixed as France and Belgium delivered solid activity, although markets were relatively weaker in Germany, the Nordics and Britain.
The performance of the company’s insulated panels segment, which is the largest arm of its business, broadly reflected the trends experienced across the wider group.
Kingspan said sales volume in the segment was ahead of prior year, although was outpaced by growth in order intake volume.
However, selling prices overall, although generally stable in the period, were lower than in the first half of 2023 reflecting year-on-year raw material movements.
Activity in North America “continued to demonstrate strength and conversion to the insulated panel solution and building technology”, Kingspan said.
“Our sector experience and deep specification channel in technology, electric vehicles, microchips and data applications has driven much of the trend in recent years.”
It said volume growth in Latin America was encouraging as the group expanded its geographic presence and product set.
Sales in France and the Benelux countries were described as “solid”, but southern Europe, Germany and Britain “have all had their challenges, and the Nordics even more so”.
Activity in central Europe improved notably in recent months, while Asia Pacific activity in the first half was “subdued”.
“On the whole, order intake has significantly exceeded volume dispatches in the period and would point towards a better second half performance,” the company said.
In terms of outlook, the company said it expects to deliver “a better performance” in the second half with trading profit growth anticipated for the full year.
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