Irish engineering group Mincon said revenue had fallen in the first half of the year as sales fell and foreign exchange provided a headwind to its growth.
In a trading update for the six months to the end of June, the company said revenue had fallen from €85.1 million in the first half of 2022 to €80.6 million in 2023.
Chief executive Joe Purcell said it had been a challenging period for Mincon, with revenue falling primarily due to a shortfall in sales to the mining industry and the impact of foreign exchange.
“This performance in the sector is down to several factors but mainly due to reduced exploration activity and certain larger customers taking advantage of improved freight conditions to reduce inventories,” he said. “We are, however, working on regaining some of this revenue with some positive drilling results from customer testing that we are doing in all our regions, most notably in APAC.”
Shares in Mincon, which are usually lightly traded, fell more than 8 per cent in Dublin.
Mincon said it had consolidated gains made last year in the construction sector, with revenues also including a higher proportion of smaller projects to give a more sustainable spread to the business.
“As a result of the lower mining revenues, we have looked closely at our costs and have taken selective, targeted action to reduce costs where appropriate,” Mr Purcell said. “The results of this cost-reduction exercise will be seen in [the second half of the year], which should help us to recover margins.”
Mincon is also working on a number of projects, including a collaboration with Subsea Micropiles, with the assembly of the subsea rig at its facility in Shannon already under way. The company is working towards getting subsea testing under way within the next six months.
It has also invested €4.3 million in property, plant and equipment, including a new heat-treatment facility at Shannon, and plans for the commissioning of a new manufacturing building there with purpose-built robotic machining cells.
The company is expecting to grow revenue in the second half of the year, and reduce costs to improve margins.
“These transformational product development projects as well as the continuous improvement initiatives we are engaged in across our product lines give us confidence about the future of our business,” Mr Purcell said.
“While the first half of 2023 has been challenging, we are confident that our focus on the efficiency of our production facilities but, more importantly, the efficient products we have today as well as those in development will ensure that we can grow and thrive in the longer term.”
