By Anna Ringstrom
STOCKHOLM (Reuters) - Radiation therapy equipment maker Elekta on Wednesday reported a big jump in profit in its first quarter even though sales fell because of the COVID-19 pandemic.
The strong performance was because the Swedish company's core profit margin rose to 18.5% in the quarter from 13.9% a year earlier.
Acting CEO Gustaf Salford said in an interview that was mainly down to cost control and a strong performance at the company's services business, which increased sales by 7%.
The company's shares were up 14% in early trade.
Elekta, which is looking for a new chief executive after the CEO's unexpected resignation in June, said group sales were still affected by restrictions leading to delayed installations and so far only China had returned to a normal level of installation.
"We have a big backlog. The orders are booked - it's more a matter of getting access to the customers' sites," Salford told Reuters.
Order intake in the quarter was hampered too by the pandemic, but increased 4% on the back of a large order in the United States.
"Most other regions experienced a large decline in order volumes, especially EMEA, where large parts of the healthcare systems were focusing on dealing with the pandemic," Salford said in a statement.
He told Reuters there was great uncertainty in the United States and parts of Europe regarding customers´ purchasing decisions going into the second quarter as healthcare systems remain strained due to the pandemic.
He said Elekta booked around 10 orders for its new radiation therapy system Unity in the quarter.
Analysts at Jefferies said the company's Q1 order intake, helped by Unity orders, proved to be more resilient than estimated.
They said that despite the top line miss, a favourable sales mix and cost control drove a 19% beat in EBITA.
Elekta's operating profit jumped 42% in the quarter (May-July) from a year earlier to 335 million crowns ($38.2 million) despite a 5% sales drop to 2.98 billion. Four analysts polled by Refinitiv had on average forecast a profit of 172 million crowns.
Germany's Siemens Healthineers announced this month it was buying Elekta's bigger U.S. rival Varian Medical Systems.
Elekta has a global market share of around 35%, it says.
($1 = 8.7668 Swedish crowns)
(Reporting by Anna Ringstrom; Editing by David Goodman and Jane Merriman)