Building materials group Kingspan has announced sales for the first quarter of €1.9bn, an improvement of 47% year-on-year, although it complained of inflation in the cost of raw materials over the past six weeks amid geopolitical instability.
Sales of the company's insulated panels rose 44% compared to the same period last year, with prices rising in response to inflation. Otherwise, order intake volumes were "broadly flat" year-on-year, although the company's global backlog has increased 19% in volume.
Insulation sales were up 72% in the first quarter, bolstered significantly by last summer's acquisition of Logstor, which continues to trade strongly in district heating solutions.
Underlying sales growth of 22% reflects price increases, with sales volumes again in line with Q1 2021, although sales grew strongly in Australia and New Zealand as well as central and eastern Europe, offsetting declines elsewhere. The company offloaded its Russian arm this month.
Sales in Kingspan's light & air division, rose 41% and 16% on an underlying basis, with strong performances across all key markets, and the firm said the pipeline of business in both daylighting and associated natural air ventilation applications was "encouraging".
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Data & flooring sales rose 32% year-on-year, with continued data centre construction offsetting anticipated weaknesses in new office construction, while water & energy revenue was up 24%, albeit at a reduced margin.
Europe was the Cavan-based group's strongest market, but in a trading update the company said it had made "a positive start to the year" in the Americas, with an "encouraging" pipeline of business in North American and "robust" order intake in Latin America. Business activity in Australasia has also improved following a subdued 2021.
Kingspan's net debt stood at €905m at the end of Q1, with the company having spent €67m on acquisitions in the first three months of the year. The group said it has liquidity in excess of €2.1bn between cash and undrawn committed facilities, including €800m agreed this month.
"Working capital levels remain elevated as we continue to hold higher than average levels in a choppy supply chain environment," the company said, adding that its outlook for the second quarter is positive with a strong order backlog on hand and decent activity in most markets.
"Raw material inflation remains an issue to be firmly managed, coming on the back of a highly inflationary year in 2021. As previously highlighted, margins year on year are likely to see a lag associated with this," the group reported.
"Overall, given ever increasing concerns around energy conservation, availability and climate change, Kingspan's distinctive range of solutions and Planet Passionate agenda positions the group favourably for the years ahead."
Photo (l-r): Kingspan chairman Eugene Murtagh, CEO Gene Murtagh and Geoff Doherty (Pic: Leah Farrell/RollingNews.ie)
