Element Six Posts loss for 2009 but optimistic for better performance in the current year
16 August 2010
According to figures posted by De Beers, 60% owner of supermaterials company, Element Six, on the group financial performance, Element Six experienced a challenging trading environment throughout 2009 with total sales declining 34% on 2008. In an article in the Irish Times, it says that losses were US $36m will says falling to US$205 m over the period.
In its report, it states that Element Six’s “Oil and Gas Division faced a notable decline in sales as natural gas and crude oil prices fell, reducing drilling activity by more than 60% for part of the year. Following a change in leadership at the end of 2008 and a testing operating environment, 2009 was a year focused on restructuring, cash generation and strategic planning.”
Further the report says that the company “responded swiftly to the global economic decline by cutting costs, including major plant restructuring, reducing capex by more than 80%, and tightly managing inventory and debtors to generate cash. This approach has driven a more competitive cost base, but also offers better business continuity to customers by ensuring crucial product lines can be manufactured across multiple sites. Restructuring is now complete and no further major changes are planned in 2010.”
E6 Abrasives, the primary business in the Group, managed to generate a strong cash flow, reducing net debt by almost one third. This was achieved by major cuts and restructuring of its processing plant in Shannon, Ireland, where local management produced a plan last Julyto save 240 jobs and offer a long-term future for that facility. Element Six is currently split into four business areas, E6 Abrasives, E6 Hard Materials, E6 Oil & Gas and E6 Technologies.
The company says that “In 2009, E6 formulated a compelling new vision and five-year strategic plan. The approach restores focus on E6 as a diamond supermaterials supplier, reorients the business towards continuous product innovation and restates the importance of close customer partnership and service. This vision will support strong structural growth and deliver greater margins through diamond and diamond-like applications.”