Kromek Group's First Half 2025 Earnings: A Glimpse into the Future

Kromek Group plc (AIM: KMK) has released its interim results for the six months ended 31 October 2024, revealing a loss per share of £0.009, a slight improvement from the £0.005 loss in the first half of 2024. While the company is still in the red, there are signs of progress and optimism for the future.

Revenue decline and increased expenses contributed to the earnings loss in the first half of 2025. Revenue decreased to £3.7m from £7.1m in the same period last year, a significant drop of 47.9%. This decline can be attributed to a combination of factors, including a sustained delivery under landmark collaboration contracts and other component supply agreements, as well as a slowdown in the ultra-low dose molecular breast imaging program funded by Innovate UK. Additionally, the company's adjusted EBITDA loss widened to £2.3m from £0.1m in H1 2024, indicating a deterioration in the company's operating performance.

Despite these challenges, Kromek Group expects to become profitable in the current financial year, with profit significantly ahead of market expectations. This optimism is driven by the multi-year agreements signed with Siemens Healthineers, which will deliver profitability in the current financial year. Under these agreements, Kromek will receive a total of $37.5m in cash over a four-year period, with the first installment of $25.0m received in the current financial year. Additionally, Kromek will transfer 15 of its existing 174 furnaces for CZT production to Siemens Healthineers and provide them with all know-how, IP, and related services for CZT-based SPECT detector production. The company also expects to supply Siemens Healthineers with CZT-based detector tiles over the four-year period, which will make a material contribution to advanced imaging revenue from the second year of the agreement onwards.



Kromek Group's earnings guidance for the year 2025 suggests that the company is expecting to achieve further revenue growth beyond Fiscal Year 2025 while delivering sustainable profits. This growth is likely to be driven by the successful execution of multi-year agreements with Siemens Healthineers and other OEMs, as well as the expansion of production capacity and process automation, particularly at its US facility, resulting in greater manufacturing productivity and cost efficiency.

In conclusion, while Kromek Group's earnings loss in the first half of 2025 is a concern, the company's expectations for future profitability and revenue growth are promising. The multi-year agreements with Siemens Healthineers, along with the company's strategic focus on advanced imaging and CBRN detection segments, position Kromek Group for sustained revenue growth and profitability in the coming years. Investors should keep a close eye on Kromek Group's progress as it works to execute its strategic plans and deliver on its earnings guidance.