Agfa HealthCare’s Q2 sales, earnings slide

Sales and earnings for Agfa HealthCare, the X-ray device and film arm of Belgian firm Agfa-Gevaert (EBR:AGFB), both slid during the 2nd quarter.

Agfa HealthCare posted earnings before interest & taxes of $33.1 million (€37.3 million), a -4.1% decline compared with Q2 2015, on a sales decline of -5.8% to $245.6 million (€277.0 million).

Overall profits for Agfa-Gevaert were up 60%, however, rising to $35.5 million (€40.0 million), or 20¢ (€.023) per share, despite a sales slide of -6.7% to $571.9 million (€645.0 million).

“In the 2nd quarter, our efficiency measures continued to contribute to the improvement of our profitability. Also helped by positive raw material effects, we brought our gross profit margin to the highest level in more than 5 years. Our recurring EBITDA margin improved to 12.1% of revenue in the 2nd quarter and to 10.1% after 6 months. This clearly shows that we took a step towards reaching the 10% target we set for the full year. The very solid net profit is another point of satisfaction. We now expect the top-line decline rate to slow down in the 2nd half of the year,” president & CEO Christian Reinaudo said in prepared remarks.

Agfa HealthCare said its top line was off by -2.0% in constant-currency terms, “mainly explained by the Imaging segment’s hardcopy business, where sales were exceptionally high in the 1st 3 quarters of 2015.”

“The normalization of hardcopy sales in this year’s 1st and 2nd quarter led to a top-line decrease compared to the same periods in 2015,” the company said.

Gross margins were up from 39.8% in Q2 2015 to 41.9% during this year’s quarter, Agfa HealthCare said. The division won a contract with the U.S. government worth up to $768 million last week.

AGFB shares closed down -5.3% at about $2.82 (€3.18) today.

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