"Trading has been more steady over recent months" the building products group noted. Kingspan said it now expects operating profit for the year as a whole of about Euro 60 million. This performance has been aided by "a realigned cost base, minimal raw material inflation and a positive sales mix, with higher end products trading comparatively well, the Irish group commented.
Western Europe apart, construction markets remain under pressure, stressed Kingspan, particularly the non-residential sectors in Central & Eastern Europe and North America. "These markets are not anticipated to bottom out for some time yet," the statement noted.
Despite this, volumes are firmer now than in the first half-year, and Kingspan expects this to continue into quarter four, apart from in in its Access Floors business. In total, revenues in Q3 2009 were down 28 percent on those of Q3 2008, which was a slight improvement on the year to date figure of -29 percent. Overall, Q3 2009 sales rose 5 percent on Q2 2009's figures, the group said.
Kingspan said that low-rise commercial construction "remains exceptionally weak globally," and that, although Central & Eastern Europe showed a quarter-on-quarter rise, this was less than expected.
Cost reduction has given annualised fixed-cost savings of about Euro 60 million and Kingspan warned that some further reductions in are still to come.
Kingspan expects the building environment to remain challenging during 2010. "High rise is expected to weaken, and low rise commercial is expected to remain weak but stable, whilst residential is showing some signs of recovery," the group said.
In most of its businesses except Access Floors, Kingspan saw sales volumes rise from Q2 to Q3, but except for Insulation Boards in Western Europe, which experienced a 7-percent rise for the first nine months of 2009, versus the same period of 2008, all businesses showed a drop in sales volumes, ranging from 43 percent in Insulated Panels in the UK and Ireland, 30 percent in the same unit in Central and Eastern Europe and 19 percent in this sector in the Benelux region.
PIC: High-performance rigid insulation products from Kingspan were used in the roof of the New Victoria Hospital in Glasgow, Scotland.