STOCKHOLM -- Note reported second quarter revenue fell 6% year over year to SEK 1.01 billion ($94.5 million).

Adjusted for acquisitions and currency effects, revenue fell 10% organically. The EMS company's operating profit was down 6.6& to SEK 99 million. Adjusted operating profit was down 9% to SEK 97 million, adjusted for revaluations of operating assets and liabilities in foreign currencies.

Operating margin was flat at 9.8%. Profit after financial items was down 10% to SEK 86 million, and profit after tax was 11% lower, at SEK 68 million.

Total cash flow after investments, including acquisitions, amounted to SEK 137 million.

”The second quarter progressed as the first," said Johannes Lind-Widestam, CEO and president, Note. "We achieved sales ... below our expectations and somewhat below our guidance. Demand is still impacted by a weaker business cycle, which has caused temporary project deferrals by our customers, and inventory adaptations at the customer level. We still anticipate high growth going forward, even if this has been somewhat deferred compared to what our customers expected and have signaled. Our long-term plan is unchanged, and we are continuing to expand for the growth we anticipate.

"In the second quarter, we achieved an underlying operating margin of 9.6%. Even if our ambitions for operating margin are higher, we think it’s a sign of strength that we’ve continued to increase our operating margin from recent quarters, and despite us not getting the volumes we planned for. Growth generates profitability, and when the growth our customers have been signaling and placed orders for is deferred, this obviously has an impact since our plants plan staffing and resources based on a different volume. We’re working continuously on rationalizing, and still see potential here. Once these volumes increase again, this will also have a positive impact on profitability.

"The strong cashflow continued in Q2 and our operating cashflow was SEK 154 million. This was consistent with our plans and due to good profitability and from reducing the excess inventory built up during the electronic component shortage."

Note anticipates progressive improvement toward year end and guided for full year sales in the SEK 4.1 billion to 4.4 billion range with an operating margin in the 9.5-10.5% range.

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