First Quarter 2022: Increases its operating revenues and order backlog

KONGSBERG increased its operating revenues by 11 per cent compared to Q1 2021, and experienced growth in all business areas.

The EBITDA was affected by a total of NOK 182 million related to two factors, including NOK 113 million linked to an extraordinary appreciation paid to all employees. After adjusting for these, the EBITDA margin was on a level with that for the first quarter last year.

1st quarter:

  • The order intake was NOK 7,5bn compared to NOK 7,6bn for Q1 2021
  • The operating revenues were NOK 7,0bn compared to NOK 6,4bn in Q1 2021
  • The EBITDA was NOK 829m compared to NOK 883m in Q1 2021
  • The EBITDA margin was 11.8% compared to 13.9% in Q1 2021

“KONGSBERG maintained last year’s good progress in the first quarter of 2022, with increased operating revenues and growth in all business areas compared to last year. The first quarter EBITDA margin was affected by two extraordinary factors. As a result of the strain caused by, and particularly good efforts made during, the pandemic, the board decided to give all employees an extraordinary bonus in Q1 to show the Group’s appreciation. This resulted in a cost of NOK 113 million. In connection with the ongoing invasion of Ukraine, Kongsberg Maritime booked provisions of NOK 69 million during the quarter linked to customer relationships affected by the sanctions against Russia. After adjusting for these two extraordinary factors, KONGSBERG has delivered good growth in its EBITDA compared with Q1 2021,” says Geir Håøy, the president and CEO of KONGSBERG.

The order backlog continued to grow

Kongsberg Maritime (KM) had an order intake of almost NOK 6 billion, which is 46 per cent higher than in Q1 2021. The increase came particularly from the newbuild market, but the aftersales market also continues to improve. The order intake of Kongsberg Defence & Aerospace (KDA) was NOK 1.3 billion for the quarter. The defence market is characterised by relatively few but large contracts, with deliveries that normally take place over several years. Considerable fluctuations in the order intake between quarters and years are therefore to be regarded as normal. Kongsberg Digital (KDI) continued to sign new customers for its digital solutions during the quarter, and the number of both customers and installations in operation increased.

In total, the Group’s order backlog increased to NOK 49.9 billion.

Challenging raw material, logistics and component situation

The world is currently experiencing higher raw material prices, logistics challenges and component shortages. This also has direct and indirect effects on KONGSBERG.

“Due to the logistics challenges and component shortages that the world is facing, we are experiencing longer lead times and difficulty in getting hold of some components. This has for instance led to delays in deliveries of remote weapon systems, which have had a negative effect on the quarter’s operating revenues. The higher raw material prices affect the costs of manufacturing propellers, for example. We’re monitoring the situation closely and continually implementing measures. Among other things, we are considering the redesign and use of alternative suppliers. The higher raw material prices may also affect the demand for new vessels. The challenging raw material, logistics and component situation will result in fluctuations in revenues in the coming quarters,” says Håøy.

Good ability to adapt

Over the past few years, KONGSBERG has developed positively and shown a good ability to adapt to significant and rapid changes. The unpredictability linked to the COVID-19 pandemic meant that the company had to think differently, and therefore implemented a number of changes. There is still uncertainty linked to the pandemic, and in April 2022 there was a considerable lockdown in parts of China where KONGSBERG has operations. 

“This shows that we still have to plan for effects of the pandemic, and this will continue to affect our work methods and require vigilance going forward. As a consequence of Russia’s invasion of Ukraine KONGSBERG has closed down its operations in Russia and complies with the prevailing sanctions,” says Håøy.

Expects continued growth

“NOK 17.3 billion of our order backlog of almost NOK 50 billion is for delivery in 2022. This equals an order coverage that is NOK 2.7 billion higher than it was at the end of Q1 2021. In total, we expect continued growth in our operating revenues and are on schedule to achieve our ambitions for 2022,” concludes Håøy.