Pre-tax profit at Proclad International Forging fell almost 90% in a challenging period for the Glenrothes-based firm.
The manufacturer of specialist pipe fittings for energy-related industries is a sister firm of FTV Proclad International, which this month started a consultation period which could lead to 70 redundancies.
Proclad International Forging has its registered office at FTV Proclad’s Viewfield site in Glenrothes, but its manufacturing site is in Livingston.
The forging subsidiary’s turnover for the year to November 2015 fell by 18.4% to £4.82 million.
The decline in the oil and gas industry caused the firm to make about 20 redundancies at Livingston in November. Restructuring costs from the jobs cut of almost £210,000 took their toll on the financial performance.
Profit before tax plunged to £101,037, well down from the previous year’s figure of £734,274.
Director Mark Penman said the company had a profitable but challenging trading period due to the worldwide market downturn and increasingly competitive outlook within the industry.
“The decrease in volume along with adverse product mix resulted in a reduced gross margin of £0.7m (14.7%), down on the previous year of £1.1m (19.5%).”
Although down on 2014, the results at the 59-employee site were considered reasonable given the current market conditions.
The balance sheet net assets reduced by £5m to £3.3m as a result of a dividend being paid.
The parent organisation Proclad Group Ltd is registered in Dubai and ultimate parent National Industries Group Holding is incorporated in Kuwait.
Earlier this month FTV Proclad International, which manufactures cladding for pipes in the oil and gas industry, confirmed it had entered into a period of consultation with its 177-strong workforce at Glenrothes.
Its customers include BP, Shell and Total, but it has suffered as a result of collapsing investment in offshore oil and gas projects.
Mr Penman said yesterday: “There are similarities between Proclad International Forging and FTV Proclad International. Volumes and revenues in both businesses are down as a result of the downturn in the oil and gas industry, and they both face the same challenges.
“The restructuring of both businesses is to align them to current revenue streams and markets, but we stress that both are successful businesses.”