Despite achieving record-breaking income in the first six months, Kingspan, one of the largest corporations still registered on the Irish stock exchange, experienced a fall in profits exceeding 4%. Trading profit tumbled 3% to €422 million as the company navigated difficult markets and escalating expenses. Although group revenue grew by 2% reaching €4.1 billion, operating profit slumped to €397.4 million from €414.9 million as expenses soared by 10%. Kingspan’s chief executive, Gene Murtagh, pointed to the firm’s sturdy performance in the first six months, during which income hit an unprecedented peak in spite of challenging end markets. Murtagh foresees most of the annual growth occurring in the latter part of the year following a sluggish yet gradually improving start and a robust mid-year order intake. He noted the large order book and advancements in the US and emerging markets, projecting superior second-half performance leading to trading profit growth for the whole year. The trading profit, however, fell short of expectations by approximately €11 million, as noted by Goodbody analyst Shane Carberry. Trading margin shrunk by 0.6% to 10.1% due to a demand slump in some markets and the sales’ divisional composition. Net debt escalated by €544.2 million to €1.5 billion. The board announced an interim dividend of 26.3 cents following a decrease of 5.3% in basic earnings per share to 165.9 cents. While the Americas performed strongly for Kingspan, performances in Europe were uneven with France and Belgium performing robustly but weaker results in Germany, the Nordics, and the UK. Kingspan’s insulated panels segment, its largest business division, mirrored the overall company trends. Despite sales volume in the segment exceeding those of the previous year, it lagged behind order intake growth. However, selling prices were generally stable, but lower than in the first half of 2023 due to annual raw material fluctuations.
Kingspan has reported a strong performance in North America, driven by a switch to insulated panel solutions and novel construction technologies. This is partly due to the group’s expertise in technology sectors such as electric vehicles, microchips, and data applications which have been key trend drivers in recent times.
Expansion efforts in Latin America are yielding promising results, seen in the increased volume growth due to the extended geographic reach and a more diverse product offering.
The firm highlighted that while sales in France and the Benelux nations have been robust, southern Europe, Germany, and the UK have faced certain obstacles, with the Nordic region facing even bigger challenges. However, it noted marked improvement in central Europe over recent months.
Activity in Asia Pacific for the first half was less than remarkable. That said, the company reported a significantly high order intake compared to volume dispatches during this period, hinting at a potential improvement in the second half’s performance.
Overall, Kingspan maintains a positive outlook, anticipating an improved performance in the second half and predicting year-end growth in trading profit.