NKT A/S Q2 2020: Improved financial results and all-time high order intake of high-voltage projects
NKT CEO Alexander Kara says:
- Q2 2020 has been a historical quarter for NKT. We were awarded significant high-voltage projects including major shares of the German corridor projects, SuedLink and SuedOstLink. NKT continues to be a key contributor to the renewable energy transition in Europe and we have improved our high-voltage order backlog to an all-time high level. Our financial performance in Q2 2020 was satisfactory in our power cables business NKT with growth in all three business lines, whereas NKT Photonics continued to be negatively impacted by the coronavirus pandemic.
Q2 2020 financial highlights:
|Operational EBITDA margin||5.8%||-5.9%|
*std. metal prices
2020 financial outlook
The financial outlook for NKT is unchanged from Company Announcement No. 6 of 5 May 2020. The revenue (std. metal prices) is still expected to be approx. EUR 1.0–1.1bn. The operational EBITDA is still expected to be approx. EUR 40–60m.
So far, NKT has seen limited impact on the financial and operational performance from the coronavirus outbreak. Assuming that demand for NKT’s solutions and products does not turn substantially negative and that NKT can continue stable production across all production sites, NKT maintains its financial outlook for 2020.
As stated in Company Announcement No. 6 of 5 May 2020, the 2020 financial outlook for NKT Photonics, comprising an organic revenue growth of approx. 5–15% and an EBITDA margin of approx. 15–18%, was withdrawn until better visibility in the markets could be established.
The market outlook for 2nd half 2020 contains such significant uncertainties due to the coronavirus pandemic that an updated and accurate financial outlook cannot be provided at this point of time. The demand has slowed in several parts of the Industrial market, and visibility in regards to customer demand is unusually low for the remainder of the year where NKT Photonics usually generates the main part of its earnings.
The initial financial outlook is not deemed possible to achieve.
NKT Q2 2020: Improved financial performance and high-voltage order backlog at all-time high
In Q2 2020, all three business lines delivered improved revenue* totalling EUR 277.8m, up from EUR 245.0m in Q2 2019. This equalled organic growth of 15%. The main contributors were Solutions driven by execution of recent years’ order awards, and Applications contributed with organic growth of 10%. Operational EBITDA increased in Q2 2020 to EUR 16.0m from EUR 9.4m in Q2 2019 due to increased revenue combined with improved production output and cost optimization.
In Q2 2020, NKT was awarded three large high-voltage DC interconnector projects with a total value of more than EUR 1.6bn for the German SuedLink and SuedOstLink HVDC corridor projects and the Attica-Crete project in Greece. After quarter-end, NKT was also awarded orders valued at almost EUR 500m for the Shetland HVDC Link and the offshore wind connection BorWin5. The high-voltage order backlog totalled EUR 2.68bn at end-Q2 2020, and thereby more than doubled from end-Q1 2020.
NKT Photonics Q2 2020: Financial performance negatively impacted by coronavirus pandemic
The revenue in Q2 2020 amounted to EUR 14.6m, against EUR 17.9m in Q2 2019. The organic growth was -20%. As in Q1 2020, the revenue was significantly impacted by negative market development arising from the coronavirus pandemic. EBITDA for Q2 2020 amounted to EUR -0.8m, against EUR 3.9m generated in Q2 2019. This decrease was driven by the lower revenue.
Despite positive organic growth in both Aerospace & Defence and Medical & Life Science, NKT Photonics’ overall revenue and earnings in Q2 2020 decreased due to the negative impact on the Industrial segment from the coronavirus pandemic.
NKT A/S hosts a teleconference for investors and financial analysts at 10:00 am CET on 19 August 2020. It can be accessed at investors.nkt.com. The presentation for the call will be available before the teleconference. To attend, please dial in from (confirmation code: 1277578):
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