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© designersart dreamstime.com Electronics Production | August 21, 2017

1H/2017 sales slightly down for Connect Group

The 1st half of 2016 was impacted by the loss of a specific customer, ASML, at the end of that period. Consequently, the 1st half of 2016 still included EUR 8.6 million of revenue from this customer (0 in 2017).
On a like-for-like basis, there was an increase in revenue from EUR 53.4 million (2016) to EUR 59.4 million (2017). In addition, the loss of ASML led to restructuring costs of EUR 1,156K and the redundancies of 33 employees at the company's Dutch branch, both of which were also booked during the 1st half of 2016.

Jeroen Tuik (CEO) comments the half-year results:

“The figures for the 1st half of 2017 do not sufficiently reflect the efforts made in the past few months. The drop in revenue resulting from the loss of ASML in the Netherlands has been almost fully offset by orders and revenue from new or existing customers. This growth was mainly realised in our factories in Kladno and Oradea, which have been under heavy pressure in the past few months to increase their production capacity. However, realising this increase in capacity is currently proving to be a challenge, because there is high demand for employees in the regions where we recruit. We have also noticed a considerable rise in labour costs in Romania. For the 2nd year running, the Romanian government has decided to increase minimum wages by more than 15 percent. On the other hand, growing shortages on the components market are leading to an increase in component prices, which puts extra pressure on operational activities. These rising costs cannot be directly passed on to our customers in all cases, which means our margins are being squeezed. One positive aspect is the growth of our order book. At EUR 97 million, Connect Group's order book has never been bigger. Although the size of this order book is not fully reflected in our short-term revenue forecast (some orders have longer lead times), we do believe that further growth should be possible in the 2nd half of 2017.”

Connect Group NV posted revenues of EUR 59.4 million in the 1st half of 2017. In the same period in 2016, the group's turnover was EUR 62.0 million. At the end of 2015, ASML, one of the group’s clients, informed Connect Group that it would no longer place any new orders after its existing orders had been completed. Turnover from ASML amounted to EUR 8,605K in the first 6 months of 2016, but dropped to EUR 0 in the first half of 2017. Without ASML, turnover for the 1st half of 2016 would have been EUR 53,411K, as opposed to EUR 59,428K in 2017. After July 2016, revenue from ASML became negligible.

The company posted a profit of EUR 525K in the 1st half of 2017, as opposed to EUR 549K in the 1st half of 2016. This drop was mainly caused by a decrease in interest costs of EUR 127K. This decrease in interest costs is mainly a consequence of the capital increase that took place in the 2nd half of 2016.

The order book grew from EUR 89.4 million at the end of 2016 to EUR 97.3 million at the end of the 1st half of 2017.

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September 15 2017 9:25 AM V8.7.1-2