Cramlington manufacturers Osborne Engineering Limited (OEL) have narrowed losses to nearly £280,000, down from over £1m.
The specialists white metal bearings manufacturers and repairers revealed losses were down to £279,761 in the year to March 31, 2014.
In 2013 the firm, which also operates facilities in Poland, USA and the United Arab Emirates, showed turnover had fallen from £7.1m to £5.5m.
A review of the business within the latest set of accounts noted that market conditions remained “very challenging”.
OEL has received financial support in the form of loans from its holding company, AM Holdings Ltd, which is registered in the British Virgin Islands.
At the close of the year the firm owed £2.56m to the parent company but directors said the investment, coupled with changes to management and operating procedures, put OEL in a position where it could return to profit.
Director John Lawson said: “It is important to stay focussed on our core skills, but it is also important to develop and diversify wherever possible. One example of this approach is the opening of our rapid response centre in Aberdeen to service our rapidly growing North Sea oil and gas related business.
“This strategy is ensuring that not only do we provide local service on existing products, but we also rapidly develop a solutions based business, focussed on improving the efficiency and reliability of existing customer operated equipment.
“The loss of £227,580 in this financial year reflects the continued economic challenge of the market, but also reflects the development of our business into areas of growth.
“When we weigh this against the performance of recent years it is evident that very significant progress has been made.”
In August OEL announced funding from Barclays to support the opening of its Aberdeen office.
A breakdown of the firm’s turnover showed sales in the UK actually increased from £3.09m to £3.16m. Sales in Europe had fallen from £2.98m to £1.37m during the 2014 year.
Mr Lawson added: “We continue to stay focussed on driving down cost and remaining competitive in the market and will continue to develop products and services which are totally aligned with customer requirements, yet totally within the core skills of the business.
“This simple yet proven philosophy will ensure the sustainability and profitable growth of Osborne Engineering well into the future.”
Osborne Engineering launched in 1984 and employs 99 staff, split roughly between sales and administration and production roles.