Strong development in Applications despite continued challenges in construction — EnergyWatch

The danish cable manufacturer NKT is pleased to report solid growth in its Applications business, which includes the Group’s low and medium voltage cables.

This is despite a continued weak construction market with a low level of new construction and therefore also a very subdued demand for building cables.

”The construction-driven part of the business continues to be a challenging area, but the level is more stable now compared to previous quarters,” says NKT’s CEO, Claes Westerlind, in an interview with MarketWire after Wednesday’s third quarter report.

NKT’s sales of building cables and other construction-exposed products thus remained at a low level in the third quarter, and the company is focusing on mitigating the impact of the headwinds in these areas.

However, strong progress in the rest of Applications means that the business as a whole can show revenue growth of EUR 25.5 million compared to the same quarter last year to EUR 155 million.

This corresponds to an organic growth of 18 per cent, which is also reflected in earnings, where the operating profit, EBITDA, has more than quadrupled to EUR 13.1 million from EUR 2.4 million.

In comparison, analysts had expected Applications revenue of EUR 159 million and an operating profit of EUR 13 million in the quarter.

The business benefits from the electrification of society and the shift to renewable energy, which requires large investments in the electricity grid.

In addition to higher volumes, revenue is supported by price adjustments that have been implemented to compensate for inflationary pressures.

(Translated using DeepL with further editing by Anne Filbert)