Kingspan trading profit grows 64% to €329m

Raw materials price increases leave insulation maker seeking to recover €600m

Kingspan chief executive Gene Murtagh described the company’s first-half performance as remarkably strong

Kingspan chief executive Gene Murtagh described the company’s first-half performance as remarkably strong

 

News that Kingspan grew profits by 64 per cent to €329 million in the first six months of the year boosted the insulation specialist’s shares by more than 2 per cent on Friday.

Kingspan said sales rose 41 per cent to €2.9 billion in the first half of 2021 from €2.07 billion during the same period last year.

Its trading profit rose 64 per cent to €328.9 million in the opening six months of this year.

Kingspan’s stock climbed more than 2 per cent on the back of the news. The shares were trading at 2.47 per cent ahead at €96.16 shortly before the Dublin market closed. Earlier they hit a high of €97.80.

The Co Cavan-based multinational noted that raw-material price increases would force it to recover more than €600 million over the course of this year.

A statement noted efforts to recover higher raw-material charges from customers had succeeded so far. However, the group also noted the price inflation could continue into next year.

Kingspan spent €496 million buying rivals, including €242 million on Danish business, Logstor, as well as Romania’s Terasteel, Bromyros in Uruguay and Thermakraft in Australia and New Zealand.

Performance

The Irish group makes and sells insulation and building materials in 129 factories in 70 countries in Europe, the Americas, Asia and Australia and other regions.

Chief executive Gene Murtagh described its first-half performance as remarkably strong. “Despite inflation in our input costs, effective price management has helped increase trading margins, with a stand out performance in our largest division – insulated panels,” he said.

Mr Murtagh added that strong future demand meant Kingspan was positive about the outlook for the rest of this year.

The figures show that trading profit from insulated panels sales almost doubled to €223.6 million in the first half from €123.3 million during the same period in 2020.

Sales rose 44 per cent to €1.92 billion from €1.33 billion. Kingspan said deliveries hit a record 40 million square metres.

Insulation boards boosted trading profit by 44 per cent to €70 million on sales of €499.5 million, which were up 36 per cent.

Profits at Kingspan’s light and air division, which makes skylights, ventilation and related products, slipped 14 per cent to €6.5 million, although sales rose 39 per cent to €239.5 million.

Kingspan signalled that it will do more deals in this business to boost the operation’s yearly sales to €1 billion from an expected €550 million in 2021.

Last year it bought Colt Group which increased the division’s northern European presence.

Acquisition

Its recent acquisition of Skydome, doubled the unit’s size in France, while buying Major Industries grew it in the United States.

Profits in its water and energy operation rose 72 per cent to €11.9 million, while revenues increased 36 per cent to €126.3 million.

Data and flooring, which supplies office and industrial building construction, increased profits by 23 per cent to €17 million.

Kingspan said the division’s main focus is providing equipment meant to run data centres efficiently.

The group’s net debt increased by €365.5 million in the first half to €601.7 million. A €430.9 million charge charge for acquisitions was the main contributor to this.

Kingspan had cash and available debt totalling €1.6 billion on June 30th, up from €1.18 billion 12 months earlier.

In a statement, the group said that 2021 was an “abnormally buoyant year in an unparalleled environment”.