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Investing.com - Norway’s Tomra Systems (OL:TOM) has reported lower-than-anticipated net sales, as weaker volumes in new markets like Austria weighed on demand in Europe.
Revenues fell by 2% versus a year ago to 325 million euros, missing consensus expectations by 5%.
Tomra, which provides solutions for advanced technology systems that aim to minimize waste in the food, recycling and mining industries, was dented by a 12% fall in revenues at its collection unit. The division, which offers services for more efficient collection of beverage containers for recycling and reuse, saw sales climb in all regions apart from Europe, excluding the northern portion of the continent.
Revenue was especially impacted by lower sales in Austria, which launched a deposit return system (DRS) for single-use beverage containers in January, Tomra said.
This was partially offset by stable recycling unit sales and savings-driven strength at Tomra’s food operations. But analysts at Jefferies noted that a shift in Tomra’s product mix toward metals led to a gross margin decrease at the segment to 46%.
Group-wide adjusted earnings before interest, taxes and amortization came in at 44 million, above analysts’ projections. The figure translated to a margin of 15%, up from 13% in the second quarter of 2024.
Meanwhile, Tomra warned that current global trade tensions and tariffs could negatively impact "customers’ investment sentiment" in the coming months, adding that approximately 15% of its revenues are generated from sales in the United States which may be subject to recently elevated import duties.
"The results highlight Tomra’s resilience in margin management despite top-line pressure, though the sharp decline in Collection and soft outlook for Recycling underscore the importance of execution in new DRS markets and navigating macro headwinds," the Jefferies analysts said.
Shares of Tomra were lower by more than 7% in mid-morning European trading on Thursday.