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UPDATE 2-Elekta Q2 core EBITA, order intake lag forecasts, shares down
December 1, 2016 / 7:30 AM / a year ago

UPDATE 2-Elekta Q2 core EBITA, order intake lag forecasts, shares down

(Adds CEO comment, share reaction)

Dec 1 (Reuters) - Swedish radiotherapy equipment maker Elekta posted fiscal Q2 core profits and order intake below forecast on Thursday amid tough market conditions and a change in its supply chain process, sending its shares down.

* Aug-Oct EBITA excl. one-off items and bad debt losses fell yr/yr to 391 mln SEK ($42.37 million) from 451 mln, vs Reuters poll fcast 450 mln

* Elekta said its change of supply chain process to produce-to-order had a negative one-off effect on net sales of 650 mln SEK in H1, vs earlier guided 500 mln

* CEO Richard Hausmann to Reuters: Larger-than-guided effect from shift to produce-to-orders is because revenues from a few contracts were delayed to Q3, in line with new strategy to ship orders only if installation is due to start within 3 months

* Order intake 3.38 bln SEK (3.40) vs consensus 3.46 bln

* North and South America division orders returned to growth mainly driven by strong performance in Latin America

* Hausmann, CEO since June, to Reuters: Overall it is still a challenging market situation, however has very good momentum and believes wins market share in India, south-east Asia, China.

* Said measures for improvement in North and South America are slowly yielding results, demand in South America growing, but weak economic conditions throughout the region have slowed investments in new equipment

* CEO to Reuters: North America market is flattish or slightly growing, sees good momentum currently from stereotactic radio surgery and stereotactic body surgery applications

* CEO to Reuters: very good pipeline for Elekta’s new radiation therapy system MR-linac, in final negotiations for a number of contracts, still aims to ink orders for 75 MR-linac by end-2019, price $8-10 mln

* Shares down 4.7 pct at 0900 GMT, taking a YTD rise to 0.7 pct, vs -0.8 pct and -14.9 pct respectively for the STOXX Europe 600 Health Care Index

* Said programme, launched 2015 following very weak development in the previous fiscal year, to cut cost with 700 mln SEK from 2017/18 progressing according to plan

* CEO to Reuters: definitely sees space for acquisitions of additional applications within oncology informatics

* Main rival is U.S. group Varian Medical Systems with other competitors including U.S. Viewray Further company coverage: ($1 = 9.2282 Swedish crowns) (Reporting By Anna Ringstrom; Editing by Johannes Hellstrom)

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