Kongsberg misses order intake estimates, shares slip

By Marta Frackowiak

July 13 (Reuters) - Norwegian defence and technology firm Kongsberg Gruppen reported a smaller-than-expected 53% rise in second-quarter order intake on Monday, sending its shares down as much as 9%.

SB1 Markets analyst Ole-Petter Sjøvold said the shortfall was mainly due to the timing of the recognition of a $400 million Norwegian Advanced Surface-to-Air Missile System contract with Raytheon for Kuwait, which had yet to be recorded.

Adjusted for that, order intake was broadly in line with expectations, he said, adding that the purchase price for missile systems developer Zone 5 — a deal Kongsberg completed last month — appeared lower than SB1 Markets' forecast.

Kongsberg, which serves defence, security and technology sectors, said quarterly orders rose to 17.07 billion Norwegian crowns ($1.75 billion) from 11.19 billion crowns a year earlier.

"We are experiencing growing interest in security both below the sea surface and in space, areas where Kongsberg is well positioned," CEO Eirik Lie said in a statement.

Kongsberg, which spun off its maritime business in April, has seen demand rise sharply as European governments boost military budgets, replenish weapons stocks and seek more air-defence, missile and counter-drone systems after the war in Ukraine exposed gaps in the continent's defences. 

Kongsberg said last year it was expanding production capacity to meet rising orders.

"We are also prepared for building up more capacity when we see that is needed," Lie told Reuters, adding the company was in talks with governments and customers to better understand future demand.

In May, Kongsberg reported first-quarter orders more than doubled, driven by strong demand for weapon stations and counter-drone systems.      

Last month, it said it was seeking to triple its revenue by 2029 and more than quadruple it by 2033.

"The order backlog and market developments we have seen in the second quarter position us well to realise these ambitions," Lie said.

($1 = 9.7783 Norwegian crowns)

(Reporting by Marta Frąckowiak in Gdańsk. Editing by Subhranshu Sahu and Mark Potter)