Irish engineering group Mincon experienced "significant growth" in the first quarter of this year as challenges in the supply of raw material began to ease, it said in a trading update on Monday.
The company, which specialises in the design, manufacture, sale and servicing of rock drilling tools and associated products, said it carried the “positive revenue momentum” from the previous six months into the first quarter of 2022.
It said it continued to build on its order books during the quarter, driven by “strong underlying demand” for its products across the construction, mining and waterwell/geothermal sectors.
“Our manufacturing remains under pressure to supply the increased demand, though we have increased our capacity across the group through investment in our factories and through the acquisition of Spartan Drilling Tools, a drill pipe manufacturer in the US, in January 2022,” it said.
“We are experiencing significant growth in our three industries versus the first quarter of 2021. The majority of this is organic growth in both mining and construction, and through the acquisition of Attakroc in mid-2021, which has been a solid contributor to the group and has grown our market share in eastern Canada.”
It said recent challenges in the supply of raw material “began to ease” towards the end of the quarter, though it has “some way to go” before returning to normal.
Meanwhile, sea freight conditions “also remain challenging”, and the group continues to hold high levels of raw material and finished product to service clients’ needs.
“Whilst we have experienced margin pressure during the quarter due to the lag in recovering increases in manufacturing and operational costs through price increases to customers, we expect to recover our margin position in the coming months,” it said.
“Substantial increased energy costs have been a main driver behind our margin pressure and trying to mitigate the effect of these is paramount.
“With that in mind we have invested in new plant, in our main hammer factory in Shannon, to reduce our energy consumption and carbon footprint once that plant is commissioned later this year.”