Kongsberg shares fall 9% despite strong Q2 growth and record backlog

Investing.com -- Kongsberg Gruppen ASA shares dropped more than 9% on Wednesday after the company reported strong second-quarter results but noted rising costs, a dip in cash reserves and mixed order intake across its divisions.

Second-quarter revenue rose 20% to NOK 13.90 billion from NOK 11.59 billion a year earlier, according to the company’s quarterly report. EBIT reached NOK 1.92 billion, including a NOK 158 million gain from the sale of its steering gear and rudder business. Excluding the gain, the EBIT margin was 12.8%, up from 12.5%.

Group earnings after tax increased to NOK 1.62 billion from NOK 1.18 billion, and earnings per share rose to NOK 1.85 from NOK 1.36.

Order intake totaled NOK 18.18 billion in the quarter, up from NOK 17.28 billion in the same period last year.

The total order backlog reached a record NOK 138.80 billion, compared with NOK 134 billion at the end of the first quarter and NOK 95.56 billion a year earlier.

Kongsberg Defence & Aerospace posted revenue of NOK 6.12 billion, a 38% increase from the prior year. 

The division signed a NOK 6.5 billion Joint Strike Missile contract with Germany in June, becoming the fifth country to order the system. 

The unit recorded order intake of NOK 9.84 billion and ended the quarter with a backlog of NOK 109.24 billion.

Kongsberg Maritime generated revenue of NOK 6.39 billion, up 7%. Offshore vessel solutions accounted for 35% of the segment’s newbuild orders. 

Order intake was NOK 7.52 billion, and the backlog reached NOK 26.20 billion. EBIT was NOK 716 million, with a margin of 11.2%.

Kongsberg Discovery (NASDAQ:WBD) revenue rose 21% to NOK 1.23 billion, driven by deliveries of underwater vehicles and mapping systems. 

EBIT increased to NOK 230 million from NOK 143 million a year earlier. The unit reported an order intake of NOK 966 million and a backlog of NOK 2.92 billion.

Group cash and cash equivalents declined to NOK 14.39 billion from NOK 16.46 billion at the end of the first quarter. 

The company reported negative cash flow of NOK 2.08 billion, including dividend payments of NOK 1.78 billion. 

Cash flow from operations was NOK 214 million. Net interest-bearing debt stood at negative NOK 9.07 billion, compared with negative NOK 11.30 billion in the previous quarter.

During the quarter, Kongsberg formed a joint venture with Thales (EPA:TCFP) combining tactical and secure communications units in Norway. 

Kongsberg Discovery signed an agreement to acquire U.S.-based underwater acoustics firm Sonatech, pending regulatory approval.

The company said NOK 22 billion of the order backlog is scheduled for delivery in the second half of 2025.