German diagnostics systems developer, Stratec, reported lower earnings for the second quarter of the year. The decrease in profits was attributed to higher costs. However, the company remains optimistic about boosting profitability in the second half of the year through price increases and cost-saving measures.
Q2 Results
In the second quarter, Stratec recorded an after-tax profit of 1.045 million euros ($1.1 million), compared to 1.4 million euros in the same period last year. Despite the decline in earnings, sales saw a moderate increase of 4.4%, reaching 64.5 million euros.
First-Half Sales Performance
Although there was an improvement in sales during the second quarter, Stratec faced challenges in the first half of the year. Weak demand for Covid-19 tests, lower delivery volumes for veterinary diagnostic systems, and stock optimization by customers contributed to a decline in overall sales performance.
Adjusted Earnings and Margin
The company’s quarterly adjusted earnings before interest and taxes dropped from 6.1 million euros to 3.1 million euros in comparison to the previous year. The margin also decreased from 9.9% to 4.9% during the same period.
Future Outlook
Despite the challenging market conditions, Stratec expects sales to remain stable or experience slight growth compared to the previous year’s figure of 274.6 million euros. The company also anticipates an adjusted EBIT margin between 10% and 12%. However, it acknowledges the increased uncertainties caused by volatile customer order behavior.
