March 22, 2018 / 1:54 PM / a month ago

UPDATE 1-IBA swings to 2017 loss, looks for improvement this year

(Adds context, executive comment)

By Manon Jacob

March 22 (Reuters) - Belgian proton therapy company Ion Beam Applications swung to a loss last year and gave only a vague forecast for improvement in 2018, sending its shares sharply lower on Thursday.

The cancer diagnosis and therapy company acknowledged that 2017 had been a “challenging year”, with project delays and tougher competition in the proton therapy market, part of the reason it forecast an operating loss in a warning in January.

The company makes machines that deliver cancer-fighting proton beams, a super precise form of radiation, but it has been beset by delays in the construction of buildings to house its proton therapy systems by third party contractors.

It reported a recurring operating result before interest and taxes (REBIT) of 11.6 million euros last year, down from a profit of 37.1 million euros in 2016.

The group said it had taken a series of actions since the last quarter of the year with a view to returning to profit in 2018, but gave no specific forecast. Its shares traded 8 percent lower at 1350 GMT.

IBA was focusing on strict cost management and hiring expenses, but still cautious about orders being finalised, Chief Executive Olivier Legrain told Reuters.

“In China, about 60 licence requests have been made to the Chinese government but so far, nobody knows about the process of getting these licenses and the timings,” he said.

The company is also concentrating on shortening the time it takes to install its machines, in the face of competition from main rival Varian Medical Systems.

The second biggest player on the proton beams care business behind specialist IBA, Varian presents its proton therapy machines as part of a bundle of services to health providers.

In September, IBA and Sweden-based Elekta signed an agreement to develop software and sell each other’s products, a deal that should allow it to compete harder with Varian.

Delays in building buildings to house IBA’s machines forced the company to cut margin guidance for 2017-2019 last year.

“Right now, we don’t see any signal that there is more delays coming from the customers, quite the opposite,” Legrain said. ($1 = 0.8100 euros) (Reporting by Manon Jacob Editing by Biju Dwarakanath and Keith Weir)

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