Car parts manufacturer Nifco 海角视频 saw its turnover fall by more than £5m during 2019, in what the company describes as a “challenging” year.
The company, which specialises in making injection moulded plastic components from its Stockton site, saw its turnover fall from £71.1m in 2018 to £65.9m in 2019.
Nifco said part of the reason for the drop in sales was down to volatility in the automotive sector, leading to lower demand for its parts.
Writing in the company’s accounts, managing director James Casey said: “2019 saw another challenging year for Nifco 海角视频, and the automotive sector.
“Further Brexit uncertainty generated volatility in demand in the automotive sector having a knock-on effect in production levels within the major OEM manufacturers. The overall reduction in global demand also saw production levels reducing further.”
Despite the fall in sales, Nifco managed to improve its operating profit over the year, from £4.6m to £5.7m.
The increase in profits was largely down to the 2018 figures being impacted by restructuring costs of £533,000.
Mr Casey added: “The underlying operating profit margin has increased despite reduced sales through continuous improvement activities, including a continued focus on both resource efficiency and planning, and further cost saving initiatives to mitigate any losses from reduced sales levels.
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“Continued improvements in repeatable high quality production has seen significant improvement in the total quality delivered to customers and a reduction in overall cost of quality.”
The accounts also warned that Nifco’s 2020 financial results will be hit by the coronavirus pandemic, which led to many car manufacturers, including Sunderland’s Nissan plant, temporarily closing.
The company said: “The automotive market was heavily affected by the Covid crisis with the lockdown during Q2 forcing many car manufacturers to cease production in April and into May with reduced capacity into Q3.
“This has had a significant effect on turnover in Q2, specifically in April and May, we have so far seen a slow recovery back to budgeted levels towards the end of Q3 and we anticipate this will continue throughout Q4 to the end of the year.
“The use of the Government’s job retention scheme along with a stringent focus on resources requirements and cost control, allied to parent company support through deferment of group cash payments, allowed us to mitigate the short term effect on cash flow.”
Despite these issues Nifco said it was confident the business would continue its strong performance into 2021.