Neways posts record turnover - but lower result

Order intake was 6.8% higher than in the first half of 2018, largely due to new e-mobility orders. The order book stood at EUR 342.6 million at end-June 2019, compared with EUR 300.8 million at end-June 2018. “Following the record turnover recorded in 2018, we continued on our growth path in the first half of 2019, due in part to the strong demand for e-mobility solutions. Our order book remains well filled across the board, and pressure on deliveries is continuing, although geopolitical tensions have led to a slight decline in the pace of growth and certain clients are postponing orders, mainly in the semiconductor sector,” says CEO Huub van der Vrande, in a press release The company’s gross margin rose by 5.2% to EUR 101.6 million, largely as a result of higher activity levels. However, the company’s normalised operating result came in at EUR 8.9 million, a decline of 19.1%, which Neways explains do be the result of an imbalance in client demand across its locations and the associated costs that came with moving production between the locations. EBITDA amounted to EUR15.6 million compared with EUR 15.1 million in the first half of 2018. The company’s net result declined by 25.0% to EUR 5.1 million. The company managed to show growth despite volatile market conditions shows that it is making some strategically sound choices. One of these that Huub van der Vrande himself points out is Neways efforts within the e-mobility segment. “Growth was also less predictable in the first half of 2019, which led to a temporary imbalance in the capacity utilisation within the group. In addition to the extra costs related to the relocation of certain products within the group, we also made investments in the start-up for new products,” the CEO says. The company implemented a number of measures over the first half of the year which led to efficiency improvements, a relative improvement of the company’s inventory position and, after a long period of increases, the EMS provider is now seeing a moderate reduction in inventories when compared with the position at year-end 2018, Mr. van der Vrande explains. “We expect the uncertain market conditions and geopolitical tensions to play a significant role in a number of the markets in which we are active in the second half of 2019. Despite the increased instability in the market, we will continue to execute our long-term strategy,” van der Vrande concludes. Neways expect to record higher turnover for the full year 2019 when compared with 2018, and an improved result in the second half of the year when compared with the first half of 2019.