Quinn Group posts loss of €888m

Quinn Group, the business founded by Seán Quinn, has reported an operating loss of €888 million for 2009, its last year fully under his control.

The group wrote down assets by about €274 million and absorbed a loss of €644 million at its Quinn Insurance subsidiary. The value of properties in the group and some of its industrial plants, including the plastics factory in Mainz, Germany, were written down substantially.

The group – which is involved in cement, building materials and glass-manufacturing – had net liabilities of €192 million at the end of 2009 after taking provisions for related party loans of €951 million.

In a separate development Mr Quinn’s family will apply to have their legal action against State-owned Anglo Irish Bank entered into the fast-tracked Commercial Court list at a hearing on Monday.

Anglo, which intends to vigorously defend the action, is not expected to oppose the move.

Mr Quinn’s wife and five adult children – the shareholders of the Quinn Group – are seeking hundreds of millions of euro in damages over Anglo’s decision to take control of the group last month.

Anglo seized ownership of the group appointing receiver Kieran Wallace of KPMG over the family’s shares in Quinn Group (ROI), the firm at the top of the group.

The bank has installed its own directors and management to lead the business, freezing Mr Quinn out of the running of the group.

The figures published today showed the group’s manufacturing turnover fell 28 per cent in 2009, reflecting the collapse in the construction sector. Heavy cost-cutting kept gross profit margins at 27 per cent.

Overall turnover at the group including Quinn Insurance, fell to €1.6 billion in 2009 from €2.3 billion a year earlier when the group made a profit of €83 million.

The turnover within the manufacturing business – which will form the core part of the group following the sale of Quinn Insurance – was €654 million in 2009 and €658 million last year, according to draft accounts for 2010. Turnover within this business remained broadly in line last year with the 2009 performance.

The group’s overall turnover fell to €939 million in 2010 as only the first quarter turnover of €281 million at Quinn Insurance was included in the 2010 figures.

Joint administrators were appointed to the insurer on March 31st, 2010, amid the Central Bank’s concerns about its solvency. Losses at the insurer will lead to a call of €600 million on the State’s Insurance Compensation Fund to be recouped by a levy on all non-life insurance policies.

The filing of the group’s 2009 results was delayed for more than a year due to the delay in the sign-off of Quinn Insurance’s 2009 financial statements by auditors PricewaterhouseCoopers as a result of the administration.

The 2010 financial statements are expected to be finalised within the next three to four months.

The administrators agreed to sell Quinn Insurance to State-owned Anglo Irish Bank and US insurer Liberty Mutual last month.

Earnings before interest, tax and write-offs of depreciation costs and amortisation (Ebitda) – a measure of cash generated – totalled €104 million in the manufacturing business for 2009.

Under last month’s restructuring, Anglo is taking 75 per cent ownership of the group, with the banks and bondholders taking the remaining 25 per cent.