EINDHOVEN, THE NETHERLANDS – Neways Electronics reported first-half sales rose 7.9% year-over-year to EUR 213.6 million ($254.5 million), on strong contributions from semiconductor, automotive and defense customers.

Orders rose 12.1% year-over-year, primarily driven by new contracts from semiconductor and automotive customers. Bookings as of Jun. 30 were EUR 218 million, up from EUR 184.4 million a year ago.

Gross margin in revenues was EUR 84.8 million, up 9.3% from a year ago on higher sales and the realization of purchasing benefits.

Operating income was EUR 7.2 million, in line with the first half of 2016. Faster than anticipated growth in activity levels and late deliveries due to scarcity in the components market resulted in inefficiency in the production process and the greater use of temporary staff. In addition, Neways made extra investments to launch larger and more complex development projects, which dampened operating results.

Net income rose 11.4% to EUR 4.9 million, due to a one-off tax gain of EUR 400,000 and lower interest expenses.

In a press statement, CEO Huub van der Vrande said: “The increase in orders and turnover in the first half of the year shows that we are growing strongly and that OEMs clearly recognise the added value of our proposition as a full-fledged development and lifecycle partner. Both new and existing clients increasingly approach and engage Neways in the early stages in the development of electronic components and systems. This was a particularly busy first half for our developers and engineers.

"In addition to strong growth in the number of orders, the average volume of orders also increased. This increased the range of demands and requirements from our clients and the complexity of the orders. A number of projects required additional efforts due to the rapid upscaling in terms of both the size and complexity of development projects. We see clear potential to improve the execution of projects in term of both effectiveness and efficiency. However, we are not satisfied with the development of the result in the past six-month period.”

Neways guided for higher net turnover and normalized operating results for the full-year 2017 compared to the full-year 2016.

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