Profit and revenue boost at Kingspan despite £15m loss due to Russia exit

Kingspan’s decision to leave the Russian market in the wake of the country’s invasion of Ukraine resulted in a loss on disposal of assets of €16.5m (£14.7m). 

The Irish materials giant, which divested its operations to local management last April, revealed the loss in its full-year results, published today, which also showed 28% revenue growth at the business. 

The invasion also led the firm to withdraw its products in the country – which accounted for less than 1% of its global operations – and invest €200m (£178m) in a new Building Technology Campus in Ukraine. 

Preparatory work is underway on the project, according to Kingspan’s results report, but progress has “understandably” been slow to date. 

In the year to 31 December 2022, revenue increased to €8.3bn (£7.4bn) from €6.5bn (£5.8bn), while pre-tax profit was up 8% to €747m (£664m). 

Chief executive Gene Murtagh said: “The 2022 outturn was very satisfactory in the context of accumulating uncertainty over the course of a bumpy year that saw a strong first half performance giving way to a more subdued environment in the second half of the year.” 

“The combination of war in Ukraine, the consequential steep energy and consumer inflation, and an industry overstocked due to supply chain concerns were all factors that weighed on second half demand and performance,” according to the results report. 

It said its growth was achieved despite “exceptional inflation and unprecedented disruption in supply chains globally”, though it added that these were less a feature in the latter part of the year. 

Insulated panel sales increased 23%, driven by raw material price growth, while global sales of its eco products QuadCore increased 46%. 

Insulation sales grew 40%, driven by inflation and acquisitions, of which there were six made in 2022. 

In total, acquisitions last cost the firm just over €1bn (£880m) in total and included the purchase of Ondura, a French roofing firm, for €516m (£459m). 

>>See also: Kingspan ordered to halt sales of Kooltherm K15 insulation product

Recent business performance differed across sectors and regions, with ultra-energy efficient and low-carbon products in high demand. 

The firm said it anticipates a “broadly similar” trading profit in the first quarter of 2023 to that of 2022. 

It said high energy costs could weigh on demand in the year ahead but that its products could benefit from the “unprecedented impetus amongst governments and society in general to ensure measures are taken to curtail reliance on fossil fuel”. 

“Notwithstanding ongoing challenges in the global economy, we expect to see a continuation of the structural drive in favour of more sustainable buildings over the longer term,” Murtagh added.