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Investing.com -- Afry AB (STO:AFRY) stock dropped 3.5% after the Swedish engineering and consulting firm reported second-quarter results that fell short of analyst expectations, with both revenue and profit declining year-over-year.
The company posted net sales of SEK 6,674 million, representing a 7.2% decrease YoY and coming in 3% below consensus estimates. Adjusted EBITA fell 23% YoY to SEK 438 million, 7% below analyst projections, resulting in a margin of 6.6% compared to 8.0% in the same quarter last year.
Calendar effects had a significant impact on the quarter’s performance, reducing EBITA by SEK 104 million. Excluding this factor, the underlying margin remained flat compared to the previous year, suggesting better operational performance than the headline figures indicate.
Capacity utilization declined to 72.6% from 73.4% in the second quarter of 2024. The company faced continued softness in several key areas, with the Process Industries, Industrial & Digital Solutions, and Management Consulting segments underperforming due to weakness in pulp & paper, real estate, and parts of the industrial portfolio.
Despite these challenges, Afry reported a 3.8% YoY increase in its order backlog, which grew to SEK 20.7 billion, providing some positive outlook amid macroeconomic headwinds.
Management is moving forward with its strategic review and plans to implement additional restructuring measures, targeting SEK 200-300 million in restructuring costs over the next 12 months.
"While near-term pressure remains, we see backlog growth and exposure to key segments as supportive. Execution on cost actions and margin recovery will be key ahead of the CMD," Jefferies analysts noted in their assessment of the results.
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