CTT Systems (CTT) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales increased 4% year-over-year to SEK 82 million, slightly below forecast due to delayed spares and repair deliveries from component shortages, now resolved.

• EBIT for Q2 was SEK 31 million, down 7% year-over-year, with an EBIT margin of 38% versus 43%, impacted by sales mix, increased costs, and currency effects.

• Aftermarket sales accounted for 80% of turnover, with strong demand for consumables, spares, and repairs; OEM at 12%, Private Jet at 3%.

• Net profit for Q2 was SEK 25 million, with EPS at 1.96, nearly flat year-over-year.

• Order intake declined to SEK 47 million from SEK 54 million, and backlog decreased to SEK 38 million.

Financial highlights

• Operating cash flow for Q2 dropped to SEK 16 million from SEK 62 million last year, mainly due to higher inventory and working capital changes.

• Net debt stood at SEK -5 million, with SEK 49 million in cash and an equity ratio of 70%.

• Dividend of SEK 109 million paid in Q2, up from SEK 51 million last year.

• Year-to-date (Jan–June) net sales up 4% to SEK 161 million; EBIT up 13% to SEK 64 million; EPS up 15% to SEK 3.92.

• Last four quarters: net sales up 10% to SEK 350 million; EBIT up 14% to SEK 126 million; EPS up 21% to SEK 8.13.

Outlook and guidance

• Guidance for H2 2024 net sales: SEK 160–180 million, a 3–16% increase year-over-year.

• Aftermarket sales expected to grow at a similar or slightly higher pace than H1 2024.

• OEM sales to increase, but at a slower pace due to reduced Boeing 787 deliveries in Q3–Q4; normalization expected in Q1 2025.

• Aftermarket growth in 2024 will be lower than 2023’s 30% increase, as pent-up demand fades.

• OEM business expected to be a resilient growth driver, with wide-body production ramp-ups and strong order backlogs.