Element Six lost €36m last year

DE BEERS-BACKED industrial diamond manufacturer Element Six lost $36 million last year while its parent was forced to guarantee its liabilities.

Shannon-based Element Six, 60 per cent-owned by multinational jeweller De Beers and precious metals group Umicore, had sales last year of $205 million, a 40 per cent fall on the $350 million revenues it recorded in 2008.

The company lost $36 million before tax, a 10 per cent improvement on the $40 million pretax loss it recorded the previous year.

The accounts show that its parent company, Element Six Abrasives SA, registered in Belgium, made a $68 million capital contribution to the Irish-based firm. The contribution brought net assets into the black.

The group ended the year with shareholders’ funds of $18 million, compared to a $19 million liability 12 months earlier. The turnaround was entirely due to the parent’s contribution.

The accounts state that Element Six Abrasives SA provided the company with a letter stating that it would meet its Irish subsidiary’s obligations as they fell due.

They also point out that a reorganisation of the company in 2009 would allow it to return to profitability this year.

Operating losses were $11.5 million for the year, while the group spent $18.2 million on restructuring, which the accounts state largely consisted of a voluntary redundancy programme.

The number of staff it employed dropped from 622 in 2008 to 470 in 2009. Its wage bill more or less halved during the year from $62 million to $31.7 million.

Element Six designs and manufactures industrial diamonds for use in manufacturing, engineering and the oil and gas sector. Industrial diamonds are generally used for cutting and shaping hard materials, or for drilling. They were first developed in the 1950s.

Along with its base in Shannon, it has operations in the US, China, South Africa, Sweden, the Netherlands, Ukraine, Germany and Britain.

As part of last year’s reorganisation, Netherlands-based group company Indiapro became a subsidiary of Element Six Ltd in Ireland.

The Irish firm also controls a number of group subsidiaries in China and Germany and a sales operation in the US. De Beers and Umicore control the business through Element Six Abrasives and Shannon Diamond Holdings.