Sectra reports net sales of SEK 169.3 million for first quarter 2011

IT and medical technology company Sectra's (STO:SECTB) profit after net financial items for the company's first quarter, May - July 2011, rose 25.6% to SEK 16.2 million (12.9), corresponding to a profit margin of 9.6% (7.5). The Group reports an operating profit of SEK 6.5 million (9.0) and net sales of SEK 169.3 million (172.8). Order bookings rose 13.8% to SEK 190.8 million (167.7).

The reported outcome pertains to Sectra's remaining operations and does not include Sectra's modality operations in digital mammography that were acquired by Royal Philips Electronics. The agreement was signed in June and the transaction was finalized on August 31. The cash purchase consideration on a debt-free basis was EUR 57.5 million. The agreement includes an additional purchase sum of EUR 12.5 million, which falls due after five years if specially agreed conditions are met.

"The unique low-radiation mammography technology that we have developed and introduced on the market will receive broad international distribution and benefit many women. In addition to the capital gain, the transaction with Philips will contribute favorably to the Group's operating profit this financial year," says Jan-Olof Brüer, President and CEO of Sectra AB.

In the U.S., uncertainty surrounding the current budgetary savings has had a dampening effect on the market. Sectra experiences that the sales process is taking longer than before, which is delaying orders for new projects.

"The economic trend will determine the size of our customers' investments. Budgetary savings are affecting our customers within healthcare as well as authorities and defense. However, Sectra products and services contribute to enhance efficiency and save expenses in customers' operations, which in the long term will imply continued growth in our markets," says Jan-Olof Brüer.

The transaction with Philips will create greater opportunities and increased resources for Sectra to expand its operations.

"A large portion of Sectra's current revenues is generated by existing customers, in the form of additional sales and long-term agreements for products, services, support and upgrades. These customers give us a solid base for continued expansion. Increased sales of systems, products and services, combined with the work we carry out to make the installations and upgrades of our medical systems more efficient, will determine when we achieve our profit target of 15%."