NCAB’s operating profit burdened by termination of Russian operations
On 28 February, all deliveries were halted to customers in Russia and on 8 April NCAB divested its operations in Russia to the Russian management for 1 Ruble. The cost fro NCAB was SEK 43 million, which was booked as a write-down. Still, the company is reporting a strong quarter.
Net sales increased by 85% to SEK 1,141.3 million, compared with SEK 617.1 million during the same period last year. In USD, net sales increased 66%.
EBITA increased 151% to SEK 146.3 million, compared with SEK 58.4 million during the first quarter of 2021. Operating profit was SEK 93.8 million, compared with 55.4 million last year. However, the operating profit was burdened by impairment losses of SEK 43.2 million relating to the termination of NCAB’s Russian operations. Excluding the impairment, operating profit amounted to SEK 137.0 million. Profit after tax for the period amounted to SEK 66.2 million, a clear improvement from SEK 40.7 million during the comparison period.
”Despite the turbulent times, there is strong demand for NCAB’s products and services. It is positive that order intake has continued to grow and exceeds net sales despite a stabilisation in lead times. Our conclusion is that demand for PCBs is continuing to rise while NCAB is also growing its market share. The acquisitions completed in 2020 and 2021 have also made a significant contribution,” says president and CEO, Peter Kruk, in the report.
He continues to say that demand is strong in all customer segments and industries, both traditional industries and greentech, such as electrification and IoT, and that NCAB’s order intake rose 20% year-on-year.
“Russia’s war in Ukraine led initially to the cessation of PCB deliveries to Russia regardless of whether or not these were included in sanctions. We subsequently conducted an analysis and assessment of our operations in Russia and concluded that we could see more risks than opportunities by continuing to operate in the country. This culminated in the divestment of the Russian operations to the management of NCAB Russia in April, after the end of the quarter,” says Mr. Kruk.
The company has also decided on new financial targets. Going forward, NCAB is targeting net sales of SEK 8 billion in 2026, which will be achieved by equal parts organic and acquired growth. The company is also targeting an EBITA of SEK 1 billion in 2026.